Malaysian palm oil futures suffered their sharpest daily decline in over a month on Monday evening, falling for a third consecutive day as they tracked a weaker performing soyaoil on the Chicago Board of Trade (CBOT). A stronger ringgit, palm's currency of trade, also weighed on the tropical oil, said a trader, as this makes the oilseed more expensive for foreign buyers.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 1.3 percent at 2,761 ringgit ($658.95) a tonne at the close of trade, its sharpest fall in a day since Oct. 10. The market earlier fell to a low of 2,759 ringgit, its weakest in three weeks.
Traded volumes stood at 46,025 lots of 25 tonnes each on Monday evening. "Palm is down following the overnight soyabean oil market, which is looking at market oversupplies," said a Kuala Lumpur-based futures trader, referring to CBOT soyaoil, which witnessed a third session of declines following a US Department of Agriculture (USDA) crop report released last week.
The USDA had raised its corn crop forecast to 14.578 billion bushels, based on an average yield of 175.4 bushels per acre, which would top a record set last year if realised. The trader added that the stronger ringgit, currently at its strongest levels in nearly two months, also weighed on the market. It closed flat at 4.1900 per dollar on Monday evening.
A weaker export outlook also contributed to the market's decline on Monday, said another trader, as the demand for the tropical oil tails off towards the year end. Palm oil shipments from Malaysia fell 2.5-4.8 percent in the first 10 days of November versus the corresponding period last month, data from cargo surveyors showed on Friday.
In other related edible oils, the December soyabean oil contract on the Chicago Board of Trade dropped as much as 0.5 percent, while the January soyabean oil contract on the Dalian Commodity Exchange slipped up to 0.6 percent. The January palm olein contract slightly dipped as much as 0.3 percent. Palm oil is impacted by other edible oils as they compete for a share of the global vegetable oils market.
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