Palm muted by weak crude and firm ringgit
Malaysian palm oil futures were muted Monday due to a softer crude and a stronger ringgit, which combined with a low level of market participation.
By midday, the benchmark palm oil contract for December delivery on?the Bursa Derivatives exchange fell by 2 ringgits, or 0.04%. It was 4,896 Ringgit ($1,201.47), per metric ton. The contract dropped 0.77% during the last session.
A Kuala Lumpur based trader stated that the market was under pressure from lower oil prices, and a stronger Ringgit. The decline in last Friday's open interest also reflected a subdued level of market participation.
The trader added, "A?2% drop in crude oil prices has capped the gains in Chicago soyoil."
The oil prices fell to their lowest level in over a week amid hopes for a diplomatic resolution of the 'Iran War', during a UN meeting this week. Investors also hoped that shipments out of Saudi Arabia would partially recover despite continued attacks by Yemen Houthis.
Palm oil is less attractive as a biodiesel feedstock due to its weaker crude.
Dalian's soyoil contract with the highest volume rose by 0.01% while palm oil contracts fell by 0.21%. Chicago Board of Trade soyoil prices were up by 0.07%.
Palm oil monitors?the movements in price of rival edible oils as it competes to gain a share on the global vegetable oil market.
The palm currency, the ringgit MYR, has strengthened by 0.02% versus the dollar. This makes the product a little more expensive for foreign currency buyers.
Intertek Testing Services, a cargo surveyor, estimated that the exports of palm oil products from Malaysia for September 1-20 fell 12.8% compared to a month ago. AmSpec Agri Malaysia will release their estimates later today.
Technical analyst Wang Tao stated that palm oil could test support at 4,868 ringgit metric ton. A break below this level would open the door for the 4,811-4,844 range.
(source: Reuters)
