Palm oil rises

Malaysian palm oil futures ended higher on Friday, reversing losses from the morning session thanks to a boost from bullish technicals and underpinned by a weak ringgit to clock their biggest weekly rise in four months. A rally in soyoil markets pushed the tropical oil to a three-month peak of 2,349 ringgit this week, after increased biodiesel targets in the United States signalled bigger consumption of rival soy, rapeseed and corn oil for biofuels.
Palm's rally then fizzled out after soyoil prices in the United States and China eased, and as crude prices dipped, but anticipation that the ringgit would continue to slump kept a floor under prices, traders said. The August palm oil contract on the Bursa Malaysia Derivatives exchange rose 0.9 percent to 2,340 ringgit ($629.54) a tonne by Friday's close, lifting prices to its best week since early February with a 4.6 percent gain.
Total traded volume stood at 54,179 lots of 25 tonnes each, well above the usual 35,000 lots. "Even though stocks are still high, market sentiment has changed from bearish to supportive after watching last week's rise in palm and soyoil, which was due to the weakening ringgit and firm soybean oil prices," said a trader with a foreign commodities brokerage in Kuala Lumpur, adding that technical buying also lent support.
Malaysian palm oil stocks likely eased 2.4 percent to 2.14 million tonnes in May, with exports of the tropical oil surging nearly 40 percent in their biggest monthly rise in 8-1/2 years, a Reuters poll showed on Friday. Meanwhile, a palm oil exporter in the Borneo island of Sabah told Reuters that there was no reported damage to ports after a six-magnitude earthquake rocked parts of the state. Sabah is Malaysia's largest palm-growing state and home to key ports that export palm oil.
A second trader added that prices would likely be contained between 2,250-2,350 ringgit over the next few sessions. Technicals were bullish. Palm oil may retest resistance at 2,322 ringgit per tonne, with a good chance of breaking above this level and rising more to the next resistance-level at 2,346 ringgit, according to Reuters market analyst Wang Tao. In competing vegetable oil markets, the US July soyoil contract rose 0.4 percent by 1020 GMT, while the most active September soybean oil contract on the Dalian Commodity Exchange dropped 0.2 percent.