Palm oil is flat, Dalian tracking, weak ringgit
Malaysian palm futures were flat on Thursday following the Dalian market's movements and a weakening Ringgit. However, they are expected to record a second month-long drop.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for January delivery was trading flat at 4,252 Ringgit ($1,006.63) per metric ton.
The contract has fallen by 2.30% in October.
A Kuala Lumpur-based broker said, "The futures were following Dalian as they waited for new leads."
Dalian's palm oil contract, which is the most active contract, lost 0.23% while soyoil prices rose by 0.94%. Prices of soyoil on the Chicago Board of Trade fell by 0.9%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
GAPKI, the Indonesian palm oil association, reported that Indonesian palm oil inventories fell slightly to 2,54 million metric tonnes in August, down 1% from a month before. The decline in exports was offset by a fall in production, GAPKI stated.
Palm oil is more appealing to foreign currency buyers because the ringgit (the palm's trade currency) has weakened by 0.31% compared to the dollar.
According to Wang Tao, a falling channel along with the hourly RSI indicate that palm oil will continue to rise, and is likely to reach a price range between 4,289-4308 ringgits per metric tonne. $1 = 4.2240 Ringgit (Reporting and editing by Bernadette Cristina and Dewi Kuritawati)
(source: Reuters)
