Vegoils Palm oil rebounds to strongest since mid-2014 as ringgit weakens

by **Cals** Wed 03 Feb 2016, 01:46

Vegoils

[size=28]Palm oil rebounds to strongest since mid-2014 as ringgit weakens

By Reuters / Reuters | February 2, 2016 : 6:55 PM MYT

KUALA LUMPUR (Feb 2): Malaysian palm oil futures saw their biggest rise in one-and-a-half months on Tuesday, rebounding by nearly 3% from sharp losses in the previous session, on a weaker ringgit and expectations of lower future production.

In 2015, palm oil prices climbed almost 10% as the weak ringgit, Asia's worst performing currency last year, made the commodity cheaper for holders of other currencies, while a strengthening El Nino and worries that dryness linked to the weather event would dent yields also underpinned the market.

"Today's main factor is the ringgit, and there may be some pre-holiday covering interest," said a Kuala Lumpur-based trader from a brokerage firm, referring to the Lunar New Year celebrations from Feb 7–8.

"Trade is pegging February's output to be lower than January's," said another trader from Kuala Lumpur.

The palm oil contract for April on the Bursa Malaysia Derivatives Exchange gained 2.9% to RM2,514 (US$597.86) per tonne at the close of trade. It earlier reached a 20-month high of RM2,523, its strongest since May 28, 2014.

Traded volume stood at 62,083 lots of 25 tonnes each.

Palm production in Malaysia is seen rising only 0.7% this year, while Indonesian output is forecast at 35 million tonnes from 32.5 million tonnes in 2015, according to government officials.

The ringgit weakened 1.3% against the dollar to reach 4.205 on Tuesday evening, weighed down by falling oil prices and concerns over Malaysia's debt-laden state fund 1Malaysia Development Bhd (1MDB).

Switzerland's chief prosecutor said on Friday a criminal investigation into 1MDB had revealed that about US$4 billion appeared to have been misappropriated from Malaysian state companies.

Crude oil prices slipped to US$33 a barrel over concerns of rising global supplies and an economic slowdown in top energy consumer China.

The US March soyoil contract rose 1%, while the May soybean oil contract on the Dalian Commodity Exchange gained 1.2%.

Palm, soy and crude oil prices at 1027 GMT

[/size]

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	FEB6	2418	+69.00	2347	2421	417
MY PALM OIL	MAR6	2483	+72.00	2422	2491	4237
MY PALM OIL	APR6	2514	+71.00	2450	2523	32366
CHINA PALM OLEIN	MAY6	4778	+70.00	4702	4780	706536
CHINA SOYOIL	MAY6	5660	+68.00	5592	5662	394286
CBOT SOY OIL	MAR6	31.06	+3.50	30.72	31.19	7306
INDIA PALM OIL	FEB6	452.20	+3.50	450.80	454.50	1421
INDIA SOYOIL	FEB6	618.50	+3.15	615.80	619.50	18150
NYMEX CRUDE	MAR6	30.47	-1.15	30.39	31.53	78109

[size]

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel

(US$1 = RM4.2050)
(US$1 = 67.9550 Indian rupees)
(US$1 = 6.5794 Chinese yuan)
[/size]