KUALA LUMPUR (March 29): Malaysian palm oil futures slipped from a two-year high on Tuesday as a strengthening ringgit led traders to book profits, amid the recent rally in prices.
The ringgit, the currency palm oil is traded in, strenghtened by 0.3% against the dollar to reach 4.0005 around noon. A stronger ringgit makes palm more expensive for foreign currency holders.
The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 0.5% to reach 2,748 ringgit (US$687) per tonne by midday. It earlier rose to
match Monday’s intraday high of 2,764 ringgit, the strongest since March 21, 2014. Traded volumes were 14,969 lots of 25 tonnes each.
“Palm fell on ringgit strength, and technically the market was overbought. Profit taking emerged,” said a futures trader based in Kuala Lumpur.
Palm has surged 2.8% since Thursday’s close, over concerns that a drought cause by the El Nino weather pattern would impact fresh fruit yields. The El Nino, which normally brings scorching heat across Southeast Asia, may lower Malaysia’s annual palm output by 2 million tonnes in the oil year ending September 2016, said a leading industry analyst.
Malaysia is the world’s second-largest palm producer, after Indonesia.
Palm oil may break a support at 2,729 ringgit per tonne and fall towards the next support at 2,695 ringgit, as it failed to break a resistance at 2,776 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.
In competing vegetable oil markets, the May Chicago Board of Trade soyoil contract fell 0.1%, while the September soybean oil contract on the Dalian Commodity Exchange gained 0.2%.
Crude palm kernel oil’s offer price rose to 5,406.81 ringgit per tonne by midday, its highest in almost five years, according to price assessments by Thomson Reuters.
Palm, soy and crude oil prices at 0536 GMT:
Contract Month Last Change Low High Volume
MY PALM OIL APR6 2692 -13.00 2692 2692 27
MY PALM OIL MAY6 2716 -20.00 2709 2738 763
MY PALM OIL JUN6 2748 -14.00 2730 2764 8264
CHINA PALM OLEIN SEP6 5532 +26.00 5506 5572 1141876
CHINA SOYOIL SEP6 6020 +10.00 5998 6058 576550
CBOT SOY OIL MAY6 33.62 -0.50 33.52 33.69 8210
INDIA PALM OIL MAR6 524.30 -0.50 523.90 525.4 128
INDIA SOYOIL APR6 641.35 -1.35 640.2 642.8 9950
NYMEX CRUDE MAY6 39.16 -0.23 39.10 39.48 11450
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
(US$1 = 4.0010 ringgit)
(US$1 = 66.4800 Indian rupees)
(US$1 = 6.5092 Chinese yuan)
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