Palm Drops From Five-Week High as Ringgit Gains After U.S. DealRanjeetha Pakiam
Palm oil retreated from a five-week high as the Malaysian currency rallied against the dollar after U.S. lawmakers voted to raise the nation’s debt limit, cutting the appeal of ringgit-denominated futures.
The contract for delivery in January lost 0.4 percent to close at 2,400 ringgit ($762) a metric ton on the Bursa Malaysia Derivatives. Futures earlier gained as much as 1 percent to 2,432 ringgit, the highest level since Sept. 9. Palm for physical delivery in November was at 2,410 ringgit, data compiled by Bloomberg show.
Malaysia’s ringgit climbed to a one-month high after the U.S. Congress yesterday voted to halt the government shutdown and raise the debt ceiling, ending the nation’s fiscal impasse. A weaker dollar could make soybean oil, a substitute in food and fuel uses, more appealing, according to Phillip Futures Pte.
“The strengthening ringgit is likely to hurt palm oil because this may cause some shift in demand from overseas buyers to other vegetable oils such as soybean oil,” said Tan Chee Tat, an analyst at Phillip Futures in Singapore.
Soybeans for delivery in November gained 0.3 percent to $12.805 a bushel on the Chicago Board of Trade, while soybean oil for December climbed 0.3 percent to 41.50 cents a pound.
Refined palm oil for May delivery surged 1.6 percent to close at 5,974 yuan ($980) a ton on the Dalian Commodity Exchange and soybean oil for delivery in January rose 0.9 percent to end at 7,182 yuan a ton.