Malaysian palm oil futures fell more than 1 percent to a two-year low in early trade on Tuesday, hurt by weaker oils on China's Dalian Commodity Exchange and a firmer ringgit.
The ringgit rose to its strongest levels against the dollar in two weeks around noon on Tuesday, and was up 0.5 percent at 4.0080 per dollar at 0240 GMT. A stronger ringgit, palm's traded currency, makes the edible oil more expensive for foreign buyers.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 1.4 percent at 2,237 ringgit ($558.13) a tonne at the midday break, its sharpest fall in three weeks.
It earlier touched 2,235 ringgit, its lowest level since July 15, 2016.
Trading volumes stood at 26,602 lots of 25 tonnes each at Tuesday noon.
"The ringgit strengthening, a weak Dalian and poor exports are all factors for palm's decline today, though it is mainly on Dalian's weakness," said a Kuala Lumpur based trader.
"As better production is expected, slow exports due to low pricing are causing importers to buy on 'need only basis', there is no rush to buy."
June production fell 12.6 percent to 1.33 million tonnes versus the previous month, according to data from industry regulator the Malaysian Palm Oil Board (MPOB) on Tuesday. Output is expected to rise in July and throughout the third quarter of the year, in line with seasonal trends.
The MPOB data also showed that end-stocks in June rose 0.8 percent from the previous month to 2.19 million tonnes, while exports declined 12.6 percent to 1.13 million tonnes.
Malaysian palm oil shipments during July 1-10 also fell 14.4 percent from the corresponding period last month, reported inspection company AmSpec Agri Malaysia on Tuesday.
In other related oils, the September soybean oil contract on China's Dalian Commodity Exchange fell 1.7 percent, while Chicago December soybean oil edged up 0.1 percent.
The Dalian September palm oil contract declined 2.4 percent.
Palm oil prices track the performance of other edible oils as they compete for a share in the global vegetable oils market.
Palm oil may fall into a range of 2,238-2,253 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Two days Free Trials and best services packages for dealing in Stock market click here to get >> NiftyMarket Tips and Ripples Advisory One Missed call on @9644405056
No comments:
Post a Comment