By Emily Chow
KUALA LUMPUR (Reuters) - Malaysian palm oil futures dropped to their lowest in nearly three years on Thursday, tracking overnight declines in related edible oils, but trimmed losses later in the session on the back of a weaker ringgit.
A weaker ringgit, palm's currency of trade, typically lends support to the edible oil by making it cheaper for foreign buyers. The ringgit weakened 0.1 percent against the dollar to 4.0400 around Thursday noon.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 0.1 percent at 2,202 ringgit ($545.05) a tonne at the midday break, in line for a third straight session of losses.
Earlier in the session, the contract shed 1.3 percent to 2,176 ringgit, its weakest since Sept. 22, 2015.
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Trading volumes stood at 34,750 lots of 25 tonnes each at the midday break.
"Palm prices earlier weakened on China's palm olein," said a futures trader in Kuala Lumpur, referring to the palm contract on the Dalian Commodity Exchange. "Later, the weaker ringgit boosted sentiment."
Palm oil has shed 5.3 percent since the start of the month, tracking related oils, which weakened over the U.S.-China trade dispute concerns and on weak demand.
Palm oil prices are usually impacted by the performance of other edible oils as they compete for a share in the global vegetable oils market.
The Chicago December soybean oil contract edged up as much as 0.1 percent, while the September soybean oil contract on China's Dalian Commodity Exchange slipped up to 0.3 percent.
The Dalian September palm oil contract declined 0.9 percent.
Palm oil is expected to drop more to 2,187 ringgit per tonne, as it has cleared a support at 2,212 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm, soy and crude oil prices at 0535 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL8 0 +0.00 0 0 0
MY PALM OIL AUG8 2190 -8.00 2163 2193 1639
MY PALM OIL SEP8 2202 -2.00 2176 2205 12521
CHINA PALM OLEIN SEP8 4640 -40.00 4606 4656 186396
CHINA SOYOIL SEP8 5506 -14.00 5474 5518 151596
CBOT SOY OIL DEC8 28.85 +0.00 28.74 28.96 3812
INDIA PALM OIL JUL8 620.50 -3.20 618.00 623.1 419
INDIA SOYOIL JUL8 752.15 -0.60 751 752.2 2330
NYMEX CRUDE AUG8 70.84 +0.46 70.46 70.91 41287
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 4.0400 ringgit)
($1 = 68.6300 Indian rupees)
($1 = 6.6875 Chinese yuan)
(Reporting by Emily Chow; Editing by Sherry Jacob-Phillips)
Disclaimer: No Business Standard Journalist was involved in creation of this content
