Palm extends losses on stronger ringgit, weaker Dalian oils
On August 19, 2024, Malaysian palm oil futures fell for the second consecutive session, with the benchmark contract for November delivery down 0.24% at 3,672 ringgit ($837.97) per metric ton. The decline was driven by weaker Dalian vegetable oil prices, a stronger ringgit, and reduced export volumes. The ringgit’s strength, up 1.1% against the dollar, made the contract less attractive to foreign buyers. Exports of Malaysian palm oil products also dropped significantly in early August.
JAKARTA, Aug 19 (Reuters) -Malaysian palm oil futures fell for a second session on Monday, as traders gauged weakness in Dalian vegetable oils, while a stronger ringgit also added pressure to the contract.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange was down 9 ringgit, or 0.24%, at 3,672 ringgit ($837.97) a metric ton, as of 0246 GMT.
The contract lost 1.79% last week, its fourth consecutive weekly drop.
FUNDAMENTALS
* Dalian’s most-active soyoil contract DBYcv1 lost 0.38%, while its palm oil contract DCPcv1 shed 0.27%. Soyoil prices on the Chicago Board of Trade BOc2 edged 0.51% higher.
* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
* Malaysian ringgit, the contract currency of trade, strengthened 1.1% against the U.S. dollar on Monday, hitting its highest since mid-February 2023. A stronger ringgit made the contract less attractive for foreign currency holders.
* Indonesia has revised its rules on its palm oil domestic market obligation (DMO) scheme, raising the price cap in a bid to improve supplies of cheap cooking oil, while lowering domestic distribution target to 250,000 tons monthly.
* Exports of Malaysian palm oil products for Aug. 1-15 declined 22.3% from the previous month, data from independent inspection company AmSpec Agri Malaysia showed, while Cargo surveyor Intertek Testing Services said exports slumped 20.2% during the same period.
* The pace of exports during the period was slower than a decline of 12.2%-17.7% for Aug. 1-10, according to data from the two firms.
* Palm oil FCPOc3 may revisit its Aug. 14 low of 3,638 ringgit per metric ton, driven by a wave (5), said Reuters technical analyst Wang Tao. TECH/C
* Oil prices eased in early Asian trading on Monday as fears of weaker demand in top oil importer China weighed on market sentiment while investors focus on the progress of ceasefire talks in the Middle East, which could reduce supply risks.O/R
* Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
MARKET NEWS
* Asian stocks were taking a breather after global equities enjoyed their best week in nine months on expectations the U.S. economy would dodge a recession and cooling inflation would kick off a cycle of interest rate cuts.MKTS/GLOB
Source Link : https://www.xm.com/research/markets/allNews/reuters/palm-extends-losses-on-stronger-ringgit-weaker-dalian-oils-53907852
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