January 24, 2018 / 5:31 AM / 7 months ago

VEGOILS-Palm in line for 3rd straight day of gains on output cut

    * Stronger ringgit may cap gains - trader
    * Palm oil may test resistance at 2,519 rgt/T - Technicals

    By Emily Chow
    KUALA LUMPUR, Jan 24 (Reuters) - Malaysian palm oil futures
rose in early trade on Wednesday, on course for a third
consecutive session of gains, as bullish sentiment on declining
production lifted the market. 
    However, strength in the ringgit, palm's currency of
trade, may cap further gains, said a trader, as this makes palm
oil more expensive for holders of foreign currencies.
    The ringgit was 0.2 percent firmer against the dollar at
Wednesday noon, after hitting a fresh 20-month high earlier in
the day.     
    The benchmark palm oil contract for April delivery
on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to
2,504 ringgit ($639.43) a tonne at the midday break.    
    Trading volumes stood at 11,185 lots of 25 tonnes each at
the break.
    "The market is up on technical retracement and the
double-digit fall in production," said a Kuala Lumpur-based
trader. "The strengthening ringgit however may cap gains."
    The trader was referring to production figures from the
Malaysia Palm Oil Association on Tuesday, which he said showed a
17 percent decline during Jan. 1-20 compared with the same
period last month.
    Palm oil output is expected to see seasonal declines in the
first quarter of the year before picking up and heading towards
peak production in the third quarter. It last fell 5.6 percent
to 1.8 million tonnes in December, industry regulator data
    Another trader said that gains in related oils also lent
support to palm's prices, as they compete for a share in the
global vegetable oils market. 
    The March soybean oil contract on the Chicago Board
of Trade rose 0.2 percent, while the May soybean oil on the
Dalian Commodity Exchange gained 0.5 percent.
    In other related edible oils, the Dalian May palm oil
contract rose 0.8 percent. 
    Palm oil may test a resistance at 2,519 ringgit per tonne, a
break above which could lead to a gain to the next resistance at
2,555 ringgit, according to Reuters market analyst for
commodities and energy technicals Wang Tao.
    Palm, soy and crude oil prices as of 0504 GMT
 Contract           Month    Last  Change     Low   High  Volume
 MY PALM OIL       FEB8      2495   +7.00    2491   2497      97
 MY PALM OIL       MAR8      2504   +6.00    2496   2510     744
 MY PALM OIL       APR8      2504  +10.00    2493   2508    6338
 CHINA PALM OLEIN  MAY8      5236  +42.00    5214   5244  212290
 CHINA SOYOIL      MAY8      5786  +26.00    5768   5796  212122
 CBOT SOY OIL      MAR8     32.59   +0.07   32.52   32.7    8487
 INDIA PALM OIL    JAN8    559.00   -0.10  558.50  561.4      37
 INDIA SOYOIL      FEB8     739.5   +0.35   739.1    740    1370
 NYMEX CRUDE       MAR8     64.43   -0.04   64.34  64.64   25792
  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 = 3.9160 ringgit)
($1 = 63.6300 Indian rupees)
($1 = 6.3890 Chinese yuan)

 (Reporting by Emily Chow; Editing by Amrutha Gayathri)
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