VEGOILS-Palm down on stronger ringgit, better Indonesia offers

Credit: REUTERS/HASNOOR HUSSAIN

Updates with midday prices, analyst comments

KUALA LUMPUR, Nov 29 (Reuters) - Malaysian palm oil futures declined on Wednesday, as better offers from larger producer Indonesia and a strengthening ringgit weighed.

The benchmark palm oil contract FCPOc3 for February delivery on the Bursa Malaysia Derivatives Exchange slid 25 ringgit, or 0.64% to 3,872 ringgit ($833.58) by midday.

A major reason behind the decline in prices was the aggressive offers from neighbouring Indonesia, the world's biggest palm oil producer and exporter, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

"The ringgit is also somewhat strengthening, putting pressure to the already fragile exports."

The ringgit MYR= rose 0.54% against the dollar, making the commodity more expensive for buyers holding foreign currency.

In related oils, Dalian's most-active soyoil contract DBYcv1 was down 0.02%, while its palm oil contract DCPcv1 fell 1.13%.

Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.4% after an overnight surge on expectation that hot and dry weather in Brazil would reduce soybean yields in the world's top producer.

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

Oil moved in a narrow range on Wednesday as investors turned cautious ahead of a crucial OPEC+ meeting on Thursday to decide output policy in the next months, while a supply disruption in the Black Sea provided a floor for prices. O/R

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Palm oil may bounce into a range of 3,935 ringgit to 3,953 ringgit per metric ton, Reuters technical analyst Wang Tao said. TECH/C

($1 = 4.6450 ringgit)

cpo https://tmsnrt.rs/3R1ojgx

(Reporting by Danial Azhar; Editing by Rashmi Aich and Mrigank Dhaniwala)

((danial.azhar@thomsonreuters.com ; Twitter: https://twitter.com/dan_azh ;;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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