Malaysian palm oil futures rose on Friday evening, marking a second session of gains in five, buoyed by stronger crude oil prices and a weaker ringgit. Losses in the ringgit, palm's currency of trade, supported the edible oil by making it cheaper for holders of foreign currencies. The ringgit weakened 0.3 percent to 4.1155 against the dollar on Friday evening, falling from the more than one-year high reached in the previous session.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.8 percent to 2,630 ringgit a tonne by the close of trade but was down 3.1 percent on the week, its sharpest weekly decline in two months. Traded volumes stood at 32,966 lots of 25 tonnes each at the end of the trading day. "Palm rose from strength on the energy front and as the ringgit weakened from its recent high," said one Kuala Lumpur futures trader, referring to gains in US crude oil prices that hit two-year highs on Friday.
US crude futures rose as the shutdown of a major oil pipeline from Canada to the United States tightened North American markets. Another trader added that a slight recovery in soyaoil on the Dalian Commodity Exchange in China also supported palm oil. "The market is taking this opportunity to adjust to the massive sell-off. It is awaiting export figures for further leads," the trader said.
Palm oil prices dropped about 3 percent on Monday after India announced it was raising import duties on edible oils to their highest in a decade. Cargo surveyor Intertek Testing Services is scheduled to release November 1-25 data for Malaysia's palm oil shipments after 0300 GMT on Saturday. In related edible oils, the January soyabean oil contract on the Dalian Commodity Exchange was up 0.1 percent, while the January palm olein contract dipped 0.4 percent.
The December soyabean oil contract on the Chicago Board of Trade was not traded because the exchange was closed for a national holiday on Thursday. Palm oil is affected by movements in other edible oils that compete for a share of the global vegetable oils market. Palm oil could retest resistance at 2,649 ringgit a tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Comments
Comments are closed.