Vegoils Palm down for second day, on ringgit strength

by **Cals** Thu 03 Oct 2013, 22:04

Vegoils Palm down for second day, on ringgit strength

Business & Markets 2013

Written by Reuters

Thursday, 03 October 2013 19:10

(Updates prices)
* U.S. gov't shutdown weighs on greenback, lifts ringgit 1.1 pct
* Prices likely rangebound until stocks, output data out -trader
* Palm oil still neutral in 2,265-2,332 ringgit range -technicals

KUALA LUMPUR (Oct 3): Malaysian palm oil futures ended lower for a second session on Thursday, as the U.S. government shutdown buoyed the ringgit currency, curbing demand from overseas buyers.

Lingering bearish sentiment on competing soybeans, also weighed on palm prices.

The U.S. dollar sagged to eight-month lows on Thursday, as the government shutdown dragged on with no end in sight, triggering a rally in emerging Asian currencies, which climbed versus the greenback.

The Malaysian ringgit was up 1.1 percent at 3.1935, against the dollar late on Thursday, adding pressure on palm prices as it made the ringgit-priced feedstock more expensive for overseas buyers and refiners.

U.S. soybeans had plunged to a 19-month low on Tuesday, after a government report showed supplies were actually much larger than expected.
Prices on Thursday rose on bargain-hunting, but ideal weather in the U.S. grain belt could speed up harvests of bumper crops.

Bigger supplies of soybeans for crushing into soyoil, could snatch demand away from palm oil — the world's most traded vegetable oil. Traders say the drop in soyoil prices have already narrowed palm oil's discount to its competitors.

"The market came down today, because of weak soy markets. Another contributing factor is the strength of the ringgit," said a trader with a local commodities brokerage in Kuala Lumpur.

The benchmark December contract on the Bursa Malaysia Derivatives Exchange had shed 0.4 percent to 2,302 ringgit ($720) per tonne, by Thursday's close. Prices traded in a tight range of 2,285-2,310 ringgit.

Total traded volumes stood at 21,326 lots of 25 tonnes each, much lower than the average 35,000 lots.
"I think prices will be rangebound, until the Malaysian Palm Oil Board (MPOB) report," the trader added.

Industry regulator MPOB will release official data on September's stocks, exports, and output in the world's No.2 producer on Oct. 10. Malaysian palm oil stocks at end-August, stood at 1.67 million tonnes.

Technicals showed that signals continue to be neutral for Malaysian palm oil, as it remains in a range of 2,265-2,332 ringgit per tonne, Reuters market analyst Wang Tao said.

In other markets, crude oil slipped to around $109 a barrel on Thursday, on worries that a prolonged U.S. government shutdown would hurt demand in the world's biggest oil consumer.

Weaker crude oil prices could also channel some demand away from palm oil, which is often used as a substitute to produce biofuels.

In competing vegetable oil markets, the U.S. soyoil contract for December gained 0.9 percent, in late Asian trade. The Dalian Commodities Exchange is closed for a holiday, and will reopen on Oct 8.

Palm, soy and crude oil prices at 1008 GMT

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	OCT3	2340	-15.00	2339	2360	408
MY PALM OIL	NOV3	2307	-9.00	2287	2313	1791
MY PALM OIL	DEC3	2302	-9.00	2285	2310	12594
CHINA PALM OLEIN	JAN4	-	-	-	-	-
CHINA SOYOIL	JAN4	-	-	-	-	-
CBOT SOY OIL	DEC3	39.71	+0.33	39.37	39.86	11237
NYMEX CRUDE	NOV3	103.76	-0.33	103.45	103.87	14720

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=3.196 Malaysian ringgit)