VEGOILS-Palm down for second day on ringgit strength

Reuters

(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

By Anuradha Raghu

KUALA LUMPUR, Oct 3 (Reuters) - 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)

(Editing by Muralikumar Anantharaman)

Rates

View Comments (1)