Malaysian palm oil rebounded from earlier losses on Wednesday evening, rising for a third session in four as it was lifted by stronger performing soyaoil and in a technical correction. Expectations of slower than forecast output growth also aided the market recovery in late trade, said traders. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 1.1 percent to 2,514 ringgit ($578.46) a tonne by the close of trade, its strongest daily gains in a week.
Traded volumes stood at 55,888 lots of 25 tonnes each at the close of trade.
"The market is riding on expectations of better performing soyaoil on the Chicago Board of Trade despite a stronger ringgit," said a futures trader in Kuala Lumpur, as the ringgit strength earlier contributed to the decline in palm prices.
The ringgit, palm's currency of trade, rose 0.5 percent against the dollar to its strongest level in over five months. A stronger ringgit usually makes the vegetable oil more expensive for holders of foreign currencies.
Palm oil production in Indonesia and Malaysia, which account for more than 80 percent of global output, is seen rising in the coming months, in line with the seasonal trend and as the lingering effects of a crop-damaging El Nino wear off. Palm oil may retest a resistance at 2,542 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
In related vegetable oils, soyabean oil on the Chicago Board of Trade rose 0.6 percent, while the September soyabean oil contract on the Dalian Commodity Exchange fell 0.2 percent.
The September contract for palm olein dropped 0.1 percent.
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