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Palm snaps earlier losses on US soyoil gains, weaker ringgit

Palm snaps earlier losses on US soyoil gains, weaker ringgit

KUALA LUMPUR: Malaysian palm oil futures edged up on Monday, snapping two previous sessions of declines, supported by gains in US soyoil and a weaker ringgit, palm’s trading currency.

A weaker ringgit tends to support palm oil by making it cheaper for holders of foreign currencies. The ringgit was last down 0.1 percent against the dollar, and is at its weakest levels since November 2017.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.6 percent at 2,237 ringgit ($537.87) a tonne at the end of the trading day.

Trading volumes stood at 25,241 lots of 25 tonnes each.

“Palm is up tracking external market gains,” said one futures trader in Singapore, referring to US soyoil on the Chicago Board of Trade.

Another futures trader in Kuala Lumpur said the weaker ringgit was also supporting palm.

In other related oils, the Chicago December soybean oil contract gained 0.4 percent on Friday, and was last up 0.3 percent on Monday.

Meanwhile, the January soybean oil contract on the Dalian Commodity Exchange was up 0.1 percent while the Dalian January palm oil contract rose 0.7 percent.

Palm oil prices are affected by movements of other edible oils as they compete for a share in the global vegetable oils market.

Palm oil may test a resistance at 2,238 ringgit per tonne, a break above which could lead to a gain to 2,262 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

Copyright Reuters, 2018

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Source: Brecorder

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