Palm oil falls on stronger ringgit, set to snap three-day rally
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Malaysian palm oil futures were set to end a three-day rally on Monday, slipping from their highest in more than five months, as a stronger ringgit made the edible oil less attractive to foreign buyers.
Palm oil for October delivery on the Bursa Malaysia Derivatives Exchange fell 0.6% to 2,760 ringgit ($648.95 a tonne in early trade.
The contract rose to a five-and-a-half-month high in the previous session on Friday due to output drop caused by heavy rain.
Prices were dragged by a stronger ringgit, which last rose 0.2% against the dollar, making the edible oil more expensive for holders of foreign currencies.
Also dragging prices is cheaper soyoil on the Dalian Commodity Exchange, which fell 0.8%.
The palm oil contract on the Dalian, however, gained 0.5% while soyoil on the Chicago Board of Trade was up 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Two leading industry analysts told Reuters on Friday that palm oil prices will fall by the fourth quarter due to higher output and inventory levels, dampening a rally that sent the tropical oil to a five-month high last week.
Reuters analyst Wang Tao, however, said that palm oil may rise to 2,739 ringgit per tonne, as it has broken a resistance at 2,700 ringgit.
Chicago soybean futures edged higher on Monday, recouping some of last session’s losses, although gains were limited by worsening U.S.-China relations.
Gold hit an all-time high on Monday as tit-for-tat consulate closures in China and the United States rattled investors, boosting the allure of safe-haven assets, although sentiment was mixed with tech gains supporting some Asian stocks.
Oil prices edged down on Monday as rising coronavirus cases and tensions between the United States and China pushed investors toward safe-haven assets.
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