Malaysian palm oil futures rose over 2% in evening trade on Wednesday, tracking gains in US soyaoil on the Chicago Board of Trade and supported by a weaker ringgit. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was last up 1.8% at 2,104 ringgit ($501.91) per tonne at the close of trade, its third straight session of gains.
Earlier in the session, it climbed as much as 2.4% to 2,115 ringgit, its strongest level since May 21. Palm oil may rise further into a range of 2,089-2,111 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals. "The market is tracking strong gains in the overnight soya market," said a Kuala Lumpur-based trader. "The weaker ringgit is also seen as supportive of palm."
The ringgit, palm's currency of trade, eased 0.1% against the dollar to 4.1940, its weakest level in six months. A weaker ringgit usually makes the edible oil cheaper for holders of foreign currencies. In other related oils, the Chicago July soyabean oil contract was up 2.6% on Wednesday, extending gains into a third session. US grains rose on Wednesday after a US government report showed planting across the Midwest lagging way behind the average pace for the time of year. Meanwhile, the September soyaoil contract on the Dalian Commodity Exchange jumped 3.1% and the Dalian September palm oil contract rose 2.6%. Palm oil prices are affected by movements in soyaoil, with which it competes for global market share.