Palm oil up

Malaysian palm oil futures extended their gains into a third session and rose to the highest in nearly two weeks on Tuesday as the ringgit retreated, while a promising technical outlook also stoked buying interest. The Malaysian ringgit fell 0.4 percent to 3.6355 per dollar by 1009 GMT, after firming over the past three days, making the ringgit-priced tropical oil cheaper for holders of other currencies.
"There's weakness in the ringgit which provided support, and strength in palm's intraday charts which gave some buying interest," said a trader with a foreign commodities brokerage in Kuala Lumpur. "The better exports also gave some underlying support," the trader added.
Cargo surveyors reported Malaysia's overseas sales of palm rose between 8-10 percent between April 1-20 versus the corresponding period a month ago, as investors snapped up bigger shipments of processed palm.
The benchmark July contract on the Bursa Malaysia Derivatives exchange rose 0.8 percent to 2,173 ringgit ($598) a tonne by Tuesday's close. It hit 2,197 ringgit in late trade, the highest since April 8. Total traded volume stood at 46,463 lots of 25 tonnes, well above the average 35,000 lots.
Technical charts show palm is expected to approach resistance at 2,210 ringgit, as indicated by its wave pattern and a Fibonacci retracement analysis, Reuters market analyst Wang Tao said. While demand for palm oil has recovered on a month-on-month basis, export volumes are not as strong as in 2014. Shipments of Malaysian palm were at 722,170 tonnes between April 1 and April 20 in 2014, versus 701,560 tonnes this year, according to ITS.
However, market players say prices have been kept supported with sellers refusing to sell when palm falls below a five-month support of between 2,080-2,100 ringgit. "Of course the bearish factors are there. Demand is not as good as last year, exports are not that great," the Kuala Lumpur trader added. "But at the same time when prices go below 2,100 ringgit, the selling momentum goes down." In vegetable oil markets, the US soyoil May contract rose 0.5 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange gained 1.4 percent.