Palm oil soars

Malaysian palm oil futures rose on Friday, recording their first weekly gain in five and their biggest since late April, as a weaker local currency spurred buying interest for the ringgit-denominated palm feedstock. The Malaysian ringgit was at 3.2090 per dollar after having slid 1.1 percent this week, as caution mounted ahead of the US jobs data, making margins more attractive for overseas investors and refiners.
"Today the prices followed the further weakness in the ringgit," said a trader with a local commodities brokerage in Malaysia. Palm prices also faced a bout of technical correction, traders said.
"For the past 2-3 times, whenever prices went to the 2,250 ringgit level, the market was unable to close below that level and always bounced back. So now, technically, prices are bouncing back to test the 2,290-2,295 ringgit level," the trader added.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange had inched up 1.2 percent to 2,283 ringgit ($711) per tonne by Friday's close, gaining 0.8 percent this week.
Total traded volume stood at 44,186 lots of 25 tonnes, above the usual 35,000 lots.
Technicals showed that Malaysian palm oil is expected to test a resistance at 2,298 ringgit per tonne, a break above which will lead to a further gain to 2,328 ringgit, according to Reuters market analyst Wang Tao.
But a dip in global demand towards the end of July, after a strong surge in overseas sales earlier in the month, crimped gains and made investors cautious of bigger inventories in the world's No 2 producer.
Cargo surveyor Intertek Testing Services put shipments of Malaysian palm oil products 2.8 percent lower in July than in June, due to smaller purchases from China.
"We had anticipated exports to be higher in July," the Malaysia-based trader added. "Because of the fall in exports, stocks may be higher than what the market had expected."
In competing vegetable oil markets, the US soyoil contract shed 0.3 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange fell 0.7 percent.