Palm oil rebounds on weaker ringgit, higher Dalian soyoil

Palm oil may drop into a range of 2,309-2,331 ringgit per tonne

Agencies
The contract dropped 1.4% on Tuesday, dragged by estimates of a jump in June production and tracking weaker crude oil prices
Malaysian palm oil futures rebounded on Wednesday from a sharp decline in the previous session, in line with stronger soyoil on the Dalian and helped by a weaker ringgit.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 36 ringgit, or 1.53%, to 2,395 ringgit ($559.97) a tonne during early trade.

The contract dropped 1.4% on Tuesday, dragged by estimates of a jump in June production and tracking weaker crude oil prices.


FUNDAMENTALS

The ringgit, palm's currency of trade, weakened 0.07% against the dollar, making the edible oil cheaper for holders of foreign currency.

Dalian's most-active soyoil contract rose 0.17%, while its palm oil contract gained 0.52%. Soyoil prices on the Chicago Board of Trade were down 0.68%.

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Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

European Union palm oil imports in the 2019/20 season ended June 30 fell 12% from the previous season to 5.71 million tonnes. Soybean imports rose 1%.

Palm oil demand in India, the world's top edible oil importer, is set to plunge this year after the coronavirus lockdown slashed demand in the food-service sector and as households opt for alternatives at the supermarket.

Palm oil may drop into a range of 2,309-2,331 ringgit per tonne, Reuters technical analyst Wang Tao said.

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MARKET NEWS

Asian stocks were set for a mixed open on Wednesday, as an increase in new coronavirus cases in some parts of the world cast doubts over the economic recovery, leading some investors to cash in on recent gains ahead of earnings season.

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