Malaysian palm oil futures extended gains into a second session on Tuesday evening, reaching a more than one-week high, supported by gains in rival soyaoil on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange. Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange were up 0.1 percent at 2,922 ringgit ($662) a tonne at the close of trade. They earlier climbed to an intraday high of 2,944 ringgit, their strongest since November 11.
Traded volumes stood at 26,483 lots of 25 tonnes each, below the 2015 average of 44,600 lots traded in a day. Gains mainly tracked external markets in thin volume, though a slightly stronger ringgit weighed on investor sentiment, said a trader from Kuala Lumpur. "It looks like the market is trying to cover the gap at 2,963 ringgit in the absence of bearish news."
Weakness in the ringgit, the currency that palm oil is traded in, usually makes the tropical oil cheaper for foreign buyers. It hit a 13-month low on Tuesday evening before ending the day flat at 4.4170 per dollar. The Malaysian currency has lost nearly 5 percent since November 9 following the US elections and after the central bank clamped down on offshore ringgit trading.
The Malaysian central bank said it would implement "prompt supervisory intervention" against individuals or banks who traded ringgit in the offshore non-deliverable forward (NDF) market or adopted its prices. Palm oil is expected to test a resistance at 2,963 ringgit per tonne, a break above which could lead to a gain to the next resistance at 3,002 ringgit, Wang Tao, a Reuters market analyst for commodities and energy technicals, said.
In related vegetable oils, the December soyabean oil contract on the CBOT rose 0.2 percent, while the January soyabean oil contract on the Dalian Commodity Exchange gained 0.6 percent. In related vegetable oils, the January contract for palm olein on the Dalian Commodity Exchange was slightly up 0.03 percent.
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