BEIJING/SINGAPORE: Malaysian palm oil futures ended lower on Monday, ending a two-session rise as softening exports in early August and a stronger ringgit outweighed tightening inventories.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed 38 ringgit, or 1.01%, lower at 3,709 ringgit ($833.48) a metric ton.
Exports of Malaysian palm oil products during Aug. 1-10 fell 17.7% from a month earlier, independent inspection company AmSpec Agri Malaysia said on Saturday.
Another cargo surveyor, Intertek Testing Services, said exports during the same period fell 12.2%. Malaysia’s palm oil inventories at end-July fell 5.35% from the previous month, the first drop in four months, data released by the Malaysian Palm Oil Board (MPOB) showed. Crude palm oil output in the world’s second largest producer rose 13.97% from June, while exports rose 39.92%.
“The macro vegetable oil market looks weak and that will cap any major recovery in prices added with the strength in the ringgit,” said Lingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Dalian’s most active soyoil contract was down 0.29%, while its palm oil contract was flat. Soyoil prices on the Chicago Board of Trade fell 1.48%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. The ringgit, palm’s currency of trade, depreciated 0.5% against the dollar after it rallied sharply from mid-July till last week.
A stronger ringgit makes palm oil less attractive for foreign currency holders. LSEG Agriculture Research said in a note the contract may rise this week towards the resistance levels of 3,850-3,870 ringgit per ton this week, with support at 3,680-3,700 ringgit.
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