Malaysian palm oil futures fell on Monday, weighed down by expectations that production in August would rise slightly and by a stronger ringgit. The ringgit was up 0.1 percent on Monday evening at 4.2660 per dollar, after earlier hitting its strongest level in more than two months. Gains in the ringgit, the currency of trade for palm oil, typically pressure palm prices by making it more expensive for buyers holding foreign currencies.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 0.4 percent at 2,738 ringgit ($641.82) at the close of trade. Earlier in the session, it rose to as high as 2,766 ringgit. Traded volumes on Monday totalled 34,444 lots of 25 tonnes each.
The market declined on expectations of production growth, said a futures trader in Kuala Lumpur, adding this would contribute to the country's growing stockpiles. However, traders were uncertain about the extent of production gains. Palm oil production in July rose 20.7 percent from a month earlier to 1.83 million tonnes, surpassing industry expectations, according to industry regulator data.
The Malaysian Palm Oil Board is scheduled to release production data for August on September 11. In related vegetable oils, the October soyabean oil contract on the Chicago Board of Trade slipped 0.1 percent, while the January soyabean oil on the Dalian Commodity Exchange fell 0.5 percent. The January palm olein contract on Dalian declined 0.7 percent.