Malaysian palm oil futures fell late on Wednesday, charting a second day of declines, tracking overnight falls in US soyaoil on the Chicago Board of Trade (CBOT) and on a stronger ringgit. A stronger ringgit, palm's currency of trade, typically makes the edible oil more expensive for holders of foreign currencies. The ringgit strengthened 0.6 percent against the dollar to 3.9140 in late trading, its sharpest daily gain in nearly three weeks.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down 0.5 percent at 2,503 ringgit ($639.50) a tonne at the close of trade. Palm fell more than 1 percent on Tuesday, snapping four days of gains. It is also down 0.4 percent for the week so far.
Trading volumes stood at 29,374 lots of 25 tonnes each at the end of the trading day. The market decline is due to overnight losses in CBOT soyaoil, said a futures trader from Kuala Lumpur, adding that weakness in palm olein on China's Dalian Commodity Exchange and the appreciation in the ringgit contributed to palm's decline.
"The market is also trading cautiously ahead of export data release and the long weekend ahead," said the trader, referring to Malaysian Feb. 1-15 palm oil export data from cargo surveyors scheduled for release on Thursday. Malaysian markets will close early on Thursday and will be shut also on Friday for the Lunar New Year holiday. Markets will resume trading on Feb. 19.
The March soyabean oil contract on the Chicago Board of Trade fell 0.9 percent overnight, before rising 0.3 percent on Wednesday. In other related edible oils, the May soyabean oil on the Dalian Commodity Exchange fell 0.1 percent, while the Dalian May palm oil contract was down 0.7 percent.
Palm oil prices are impacted by other rival edible oils, as they compete for a share in the global vegetable oils market. Palm oil may retrace into a range of 2,466-2,486 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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