Vegoils Palm oil reaches near 3-month high over weather concerns, weaker ringgit

by **Cals** Mon 21 Dec 2015, 22:01

Vegoils

[size=28]Palm oil reaches near 3-month high over weather concerns, weaker ringgit

By Reuters / Reuters | December 21, 2015 : 7:01 PM MYT

KUALA LUMPUR (Dec 21): Malaysian palm oil futures rose to a near three-month high on Monday, as a weaker ringgit and concerns that drier weather could curb output boosted prices.

The benchmark palm oil contract for March on the Bursa Malaysia Derivatives Exchange ended 1.6% higher at 2,441 ringgit (US$568.07) a tonne. It earlier touched 2,457 ringgit, its highest since Sept. 29.

Traded volume stood at 35,603 lots of 25 tonnes each at the end of the trading day.

"There's a lot of people factoring in the weather," said a Kuala Lumpur-based trader, referring to an El Nino weather event which brings dry conditions to Southeast Asia and lowers palm's productivity.

"We will see its effects in the second quarter (of 2016). The year-end monsoon season isn't affecting palm too much at the moment, we aren't seeing too much rain."

A key monthly indicator for El Nino has reached a level not seen since 1997, according to the U.S. weather agency.

Leading analysts earlier forecast that lower output as a result of the dry weather will boost palm prices next year.

The ringgit, the currency palm is traded in, fell 0.2% against the dollar on Monday, lending some support to palm. A weakening ringgit usually boosts palm prices as it makes the tropical oil cheaper for holders of foreign currencies.

High production and low exports have been keeping palm trading rangebound in recent weeks. Palm shipments from two cargo surveyors showed on Monday a near 25% drop in exports from Dec 1-20 compared with the same time a month ago.

In competing vegetable oil markets, the U.S. January soyoil contract rose 0.9%, while the May soybean oil contract on the Dalian Commodity Exchange gained 1.9%.

Palm, soy and crude oil prices at 1016 GMT

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Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	JAN6	2273	+37.00	2250	2280	168
MY PALM OIL	FEB6	2375	+44.00	2344	2392	3609
MY PALM OIL	MAR6	2441	+39.00	2411	2457	20364
CHINA PALM OLEIN	MAY6	4696	+150.00	4548	4696	1192204
CHINA SOYOIL	MAY6	5620	+106.00	5530	5622	825378
CBOT SOY OIL	JAN6	30.80	+6.50	30.35	30.95	4950
INDIA PALM OIL	DEC5	401.80	+6.50	397.00	402.90	1588
INDIA SOYOIL	JAN6	623.85	+6.40	620.00	624.70	35370
NYMEX CRUDE	JAN6	34.50	-0.23	34.31	34.72	1130

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(US$1 = 4.2970 ringgit)
(US$1 = 66.3100 Indian rupees)
(US$1 = 6.4793 Chinese yuan)
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