Palm oil falls for fourth day, weak ringgit provide support

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KUALA LUMPUR: Malaysian palm oil futures ended lower on Wednesday, falling for a fourth straight day as an anticipation of slowing demand for the tropical oil weighed, although firm crude oil markets and a weakening ringgit kept prices propped up.
    Market participants were also cautious and stayed on the
sidelines awaiting more leads on export demand and production,
traders said, keeping trade volumes low.
    "Demand is softening and buyers are not exactly chasing. It
could be because they are well covered for Ramadan," said a
trader with a local commodities brokerage in Malaysia.
    Cargo surveyor data showed that exports of Malaysian palm
oil products during May 1-25 rose 13-14 percent from a month
ago, rising at a slower pace than earlier in May.
 
    The benchmark August contract on the Bursa Malaysia
Derivatives Exchange had edged down 0.1 percent to 2,503 ringgit
($776) per tonne by Wednesday's close. Prices in the afternoon
session rose to 2,527 ringgit as the weaker ringgit fuelled
buying interest.
    Total traded volume stood at 32,308 lots of 25 tonnes, below
the usual 35,000 lots.          
    Technicals showed that a bearish target at 2,472 ringgit per
tonne remains unchanged for Malaysian palm oil, as it has
cleared a support at 2,513 ringgit, said Reuters market analyst
Wang Tao.
   
 
    Firm crude oil, however, provided support to palm prices, as
it makes the tropical oil a more attractive option for biodiesel
feedstock.
    "We have strong crude to fuel biodiesel activities. When
crude trades above $100 there's some excitement for us," said
another commodities trader in Kuala Lumpur.
    Brent oil rose on Wednesday, holding above $110 a barrel on
renewed optimism about steady demand growth in the United
States, the world's top oil consumer, coupled with further
disruptions to Libyan supplies.
    Heightened geopolitical risk in Libya and Ukraine has helped
Brent crude gain more than 6 percent since early April
and U.S. oil gain nearly 6 percent in the month of May.

    A weaker ringgit on Monday also stoked buying interest from
overseas buyers and refiners. The Malaysian ringgit
fell 0.1 percent to 3.2200 per dollar in late trade, after
advancing 1.7 percent so far this year.
    In other competing vegetable oil markets, the U.S. soyoil
contract for July edged up 0.8 percent in late Asian
trade, while the most active September soybean oil contract
 on the Dalian Commodities Exchange gained 0.3 percent.
  Palm, soy and crude oil prices at 1020 GMT
                                                                                                                             
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      JUN4    2508    -1.00    2500    2517     416
  MY PALM OIL      JUL4    2505    +0.00    2496    2526    2542
  MY PALM OIL      AUG4    2503    -2.00    2493    2527   18621
  CHINA PALM OLEIN SEP4    5960   +56.00    5870    5976  325534
  CHINA SOYOIL     SEP4    6822   +22.00    6750    6834  307056
  CBOT SOY OIL     JUL4   40.26    +0.32   39.92   40.33    3785
  NYMEX CRUDE      JUL4  104.34    +0.23  104.05  104.39   10230
                                                                                                                             
  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