VEGOILS-Palm oil falls to near 5-month low as strong ringgit weighs

Mon May 6, 2013 6:18am EDT

* Ringgit firms after ruling coalition wins Malaysian
election
    * Palm falls to 2,230 ringgit, level last seen on Dec 14
    * Trading volume thin at 22,837 lots
    * Palm oil targets 2,160 ringgit -technicals

 (Updates prices)
    By Chew Yee Kiat
    KUALA LUMPUR, May 6 (Reuters) - Malaysian palm oil futures
slipped to nearly a 5-month low on Monday, weighed down as the
ringgit surged against the dollar following the ruling
coalition's win in the country's general elections.
    The Malaysian ringgit rose on Monday to its highest since
September 2011 after the governing National Front coalition
extended its 56-year rule, seeing off a strong challenge by an
opposition alliance that had unnerved investors because of the
potential for political instability. 
    The stronger ringgit made the palm oil feedstock more
expensive for overseas buyers and lowered refiners' margins,
keeping some investors on the sidelines.      
    "The ringgit is strong today, but the stock index is also
strong, so the palm oil market is only slightly down. We are
still seeing some rangebound trading today," said a trader with
a foreign commodities brokerage in Kuala Lumpur.
    Investors also avoided taking risks as they waited for
official data on Malaysia's April palm oil stocks and output
levels, due on Friday.
    The benchmark July contract on the Bursa Malaysia
Derivatives Exchange edged down 0.1 percent to close at 2,250
ringgit ($756) per tonne. Prices earlier fell as low as 2,230
ringgit, a level last seen on Dec. 13. 
    Total traded volumes were thin at 22,837 lots of 25 tonnes
each, compared to the average 35,000 lots.
    Technicals showed a bearish target at 2,160 ringgit has been
established, as a downtrend from the March 25 high of 2,505
ringgit has resumed, said Reuters market analyst Wang Tao.
 
    Market participants are hoping that the next report on palm
oil stocks supports prices, which have lost 7.7 percent so far
this year. However, easing exports have raised concern that
inventory levels may have fallen only marginally in April and
held above 2 million tonnes.
    Palm oil stocks in Malaysia, the world's second largest
producer, fell almost 11 percent to 2.17 million tonnes in March
from February's 2.43 million tonnes. 
    In other markets, Brent oil rose above $105 a barrel on
Monday to its highest in nearly a month as an Israeli air strike
on a Syrian military facility refocused attention on Middle East
supply risks, although prices pared gains after weak European
economic data. 
    In vegetable oil markets, the U.S. soyoil for July delivery
 gained 0.6 percent in late Asian trade. The most-active
September soybean oil contract on the Dalian Commodities
Exchange rose 1.9 percent.           
    
  Palm, soy and crude oil prices at 1004 GMT
                                                                 
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      MAY3    2246   +15.00    2240    2246      55
  MY PALM OIL      JUN3    2252    +1.00    2232    2255    1094
  MY PALM OIL      JUL3    2250    -2.00    2230    2266   10793
  CHINA PALM OLEIN SEP3    5948   +60.00    5880    5970  529046
  CHINA SOYOIL     SEP3    7374  +138.00    7276    7380  720208
  CBOT SOY OIL     JUL3   49.57    +0.30   48.90   49.73    7130
  NYMEX CRUDE      JUN3   96.24    +0.63   95.56   97.17   42470
                                                                 
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
 ($1=2.98 ringgit)

 (Editing by Tom Hogue)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.