VEGOILS-Palm oil falls to 2-week low on stronger ringgit, rival oil weakness
SINGAPORE, Oct 25 (Reuters) – Malaysian palm oil futures fell for a third consecutive session on Wednesday, weighed down by a stronger ringgit and weakness in rival oils.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange fell 41 ringgit, or 1.1%, to 3,626 ringgit per metric ton at the midday break, recording its lowest level in two weeks.
A quick harvest pace for U.S. soy is likely to boost supplies of the oilseed and its products, including soyoil. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Farmers had harvested 76% of their soybean crop by Sunday, the U.S. Department of Agriculture (USDA) said after trading ended on Monday. The figures, roughly in line with trade expectations, were ahead of the five-year average pace for each crop.
Soyoil prices on the Chicago Board of Trade BOcv1 fell 0.1%, reaching the lowest level in four months.
Despite China’s fiscal stimulus announcement, the outlook for edible oil demand remains challenging due to weak crushing margins and an ample supply of vegetable oil, said Mitesh Saiya, trading manager for Kantilal Laxmichand & Company in Mumbai.
The existing surplus of vegetable oil is impeding a full recovery, and the fiscal stimulus measures have not proven sufficient to significantly bolster the market, Saiya added.
Dalian’s most-active soyoil contract DBYcv1 fell 0.9%, while its palm oil contract DCPcv1 was down 1.1%.
The Malaysian ringgit MYR=, palm’s currency of trade, strengthened 0.2% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.
Palm oil may bounce to 3,720 ringgit per metric ton, as a wave c from 3,772 ringgit may have completed at the Tuesday low of 3,651 ringgit, said Reuters technical analyst Wang Tao. TECH/C
(Reporting by Ashley Fang; Editing by Mrigank Dhaniwala)
((ashley.fang@thomsonreuters.com))
