Malaysian palm oil futures fell on Friday, weighed down by weaker-than-expected export data and on high inventories, but a weaker ringgit provided some support. The January benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell about 2 percent to 2,286 ringgit ($523.11) a tonne, its lowest in over a week.
"Palm is range bound, exports are still not very good, which surprises a lot of people. It should improve in the second half of the month," said a Kuala Lumpur based trader. "The market is bearish because of high stocks, but is trying to hold on due to the ringgit factor." Government data from the Malaysian Palm Oil Board showed near 15-year highs of palm inventories at end-October due to an unexpected rise in production.
Export data from cargo surveyors also showed a 3-5 percent fall in the first 10 days of November compared with a month before. The ringgit lost 0.2 percent against the dollar on Friday. A weaker ringgit usually supports palm by making it cheaper for holders of foreign currencies.
Traded volume stood at 48,624 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day. Palm oil may break support at 2,319 ringgit per tonne, and fall further towards the next support at 2,232 ringgit, as a three-wave cycle from the October 9 low of 2,216 ringgit has completed, according to Wang Tao, a Reuters market analyst for commodities and energy technicals. In other vegetable oil markets, the US December soyoil contract lost 0.6 percent, while the January soybean oil contract on the Dalian Commodity Exchange gained 0.4 percent.
Comments
Comments are closed.