Malaysian palm oil fell on Monday due to selling of soyabean oil on China's Dalian exchange, despite the ringgit weakening against the dollar. The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange lost 1.3 percent at the end of the trading day to reach 2,272 ringgit ($540.31) a tonne. "The market opened higher but came down on the back of technical play when the Dalian closed lower in the afternoon," said a Kuala Lumpur-based trader with a foreign commodities brokerage.
As palm oil broke the 2,300 ringgit psychological level, this initiated a sell off in the afternoon, the trader said. "The ringgit had little impact on the market. People anticipate that the ringgit may be a single day movement, tomorrow it may strengthen back." Traded volume stood at 51,383 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day. A weak ringgit normally lends some support to palm prices, which have been tracking the volatile currency in the last few trading sessions. The ringgit, among other regional currencies, lost 0.8 percent against the dollar on Monday as China reported its weakest quarterly economic growth since the global financial crisis.
Traders also say slowing export demand from India and Europe and a build up in palm oil inventory may have some effect on the market. According to a Reuters poll, Indonesia's output and exports are seen reaching highs in September but that production will ease in October and November as the wet season approaches. In competing vegetable oil markets, the US December soyaoil contract lost 0.9 percent and the January soyabean oil contract on the Dalian Commodity Exchange slid by 0.5 percent.
Comments
Comments are closed.