KUALA LUMPUR: Malaysian palm oil futures rose in early trade on Thursday, aided by a weaker ringgit , which hit a near 10-month low, and stronger-performing rival oils on China's Dalian Commodity Exchange.
A weaker ringgit usually lends support to palm by making it cheaper for foreign currency holders. It reached 4.3850 per dollar around noon, its weakest levels since Jan. 20.
Palm oil was also supported by expectations of lower output growth in November.
Benchmark palm oil futures for February on the Bursa Malaysia Derivatives Exchange was up 1.4 percent at 2,894 ringgit ($659.98) a tonne at the midday break.
Traded volumes stood at 29,104 lots of 25 tonnes each.
"The US dollar is strengthening. The market is also up on a stronger-performing Dalian, and a possibility that crude palm oil production is not picking up," said a trader from Kuala Lumpur.
Palm prices are affected by the performance of related vegetable oils on the Chinese Dalian, as they compete for a share in the global edible oils market.
The January soybean oil contract on the Dalian Commodity Exchange rose 0.3 percent, while the January contract for palm olein on the Dalian Commodity Exchange climbed 1.6 percent.
The December soybean oil contract on the CBOT was up 0.2 percent.
Palm oil production in Malaysia, the world's second-largest producer after Indonesia, is still affected by the lingering effects of a crop-damaging El Nino.
The weather phenomenon brought dry weather across Southeast Asia, lowered palm's fruit yields, and affected the output. Production in Malaysia saw a monthly decline of 2.2 percent in October, although the output seasonally rises by year-end.
Palm oil may bounce more to 2,921 ringgit per tonne, as it has cleared a resistance at 2,881 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.
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