#palmoil
(Aug 18): Malaysian palm oil futures retreated from a 10-week high in early trade on Thursday, falling in a market correction and dragged down by a stronger ringgit.
Benchmark palm oil futures for October on the Bursa Malaysia Derivatives Exchange declined 2.5% to hit RM2,578 (US$646) per tonne at the end of the trading day, having touched a high of RM2,668 on Wednesday evening.
The market rose 4% on Wednesday in its strongest one-day gain in over 10 months on higher exports and tight supplies, with palm output still suffering from last year's crop damaging El Nino, which brings dry weather across Southeast Asia and lowering fruit yields.
Palm is up about 4.6% so far for the week.
Traded volumes stood at 63,719 lots of 25 tonnes each on Thursday evening, versus the 2015 average of 44,600.
"The market pulled back after it went too high, it cannot go higher than what people are willing to pay," said a trader from Kuala Lumpur.
The stronger ringgit on Thursday evening also weighed on palm, traders said, making the tropical oil more expensive for foreign currency holders. The ringgit, palm's traded currency, rose 0.4% against the dollar to 3.9925 in the evening.
Palm oil may rise to a range of RM2,761-2,897 per tonne in four weeks, according to Reuters market analyst for commodities and energy technicals Wang Tao.
In related vegetable oils, the Chicago Board of Trade soybean oil December contract fell 1.1%, while the January soybean oil contract on the Dalian Commodity Exchange was up 0.6%.
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