VEGOILS-Palm falls 2 pct on stronger ringgit, weaker demand

* Palm hits over one month low

* Market also weighed by higher than forecast output – trader

* Palm oil may fall towards 2,214 rgt/T – techs (Updates with closing prices)

By Emily Chow

KUALA LUMPUR, Feb 25 (Reuters) – Malaysian palm oil futures fell to a one-month low late on Monday, charting a second consecutive session of declines weighed down by expectations of weaker demand and stronger than expected output levels in the coming weeks.

Traders also said the market was under pressure from a stronger ringgit MYR= , which usually makes the edible oil more expensive for foreign buyers. The ringgit gained 0.3 percent against the dollar on Monday evening at 4.0650.

The benchmark palm oil contract for May delivery 1FCPOc3 on the Bursa Malaysia Derivatives Exchange dropped 2 percent at 2,212 ringgit ($544.16) a tonne at the close of trade, its lowest levels since Jan. 18.

Trading volumes stood at 39,281 lots of 25 tonnes each at the close of trade. 1FCPO-TOT

“The ringgit is stronger, and there is also higher production expected in February and March,” said a Kuala Lumpur based trader.

While palm oil seasonally sees monthly production declines through the first quarter of the year, industry players are expecting output to register higher levels compared to last year.

Latest official data showed that palm oil output in Malaysia fell 3.9 percent in January to 1.74 million tonnes from the previous month. The levels, however, were higher than the 1.59 million tonnes of recorded production in January last year, and 1.28 million tonnes in 2017. MYPOMP-CPOTT

Another Malaysian trader said that talk of trade agreements between the U.S. and China dampened market sentiment about palm oil.

“For me, this news is not so good for palm as China will buy soy, hence reducing their palm oil imports,” he said.

President Donald Trump said on Sunday he would delay an increase in U.S. tariffs on Chinese goods, thanks to “productive” trade talks and that he and Chinese President Xi Jinping would meet to seal a deal if progress continued. U.S. Agriculture Secretary also said China had committed to buy an additional 10 million tonnes of U.S. soybeans. imports soybeans to crush for meal to support its livestock industry, leaving soyoil as a by-product and reducing the need to import palm.

Malaysian palm oil exports for the Feb. 1-25 duration fell 6 percent versus the corresponding period last month, reported AmSpec Agri Malaysia on Monday. PALM/AAM

Another cargo surveyor Intertek Testing Services reported a 5.5 percent decline for the same time period. PALM/ITS

The Chicago March soybean oil contract BOH9 rose 0.6 percent on Monday, supported by expectations of a trade agreement between Washington and Beijing. GRA/

In other related oils, the May soyoil contract on the Dalian Commodity Exchange DBYK9 slightly rose 0.1 percent and the Dalian May palm oil contract DCPK9 was down 1.3 percent.

Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.

Palm oil may break a support at 2,237 ringgit per tonne and fall towards the next support at 2,214 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. soy and crude oil prices at 1036 GMT

Contract

Month

Last Change

Low

High Volume MY PALM OIL

MAR9

2015 -123.00

2015

2139

166 MY PALM OIL

APR9

2175 -49.00

2175

2245

6117 MY PALM OIL

MAY9

2212 -45.00

2212

2278 19737 CHINA PALM OLEIN MAY9

4668 -58.00

4662

4732 391428 CHINA SOYOIL

MAY9

5732

+8.00

5712

5766 362450 CBOT SOY OIL

MAR9

30.68

+0.17 30.57 30.81

8952 INDIA PALM OIL

FEB9 557.70

-3.00 557.30 562.6

635 INDIA SOYOIL

MAR9 765.35

-1.60 765.35 769.85

5130 NYMEX CRUDE

APR9

57.42

+0.16 56.95 57.53 106125 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 = 4.0650 ringgit) ($1 = 70.9800 Indian rupees) ($1 = 6.6817 Chinese yuan)

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