KUALA LUMPUR: Malaysian palm oil futures closed nearly 1 percent higher on Wednesday, posting their third straight session of gains, on the back of a weaker ringgit.
The Malaysian currency fell as much as 0.6 percent to 4.443 against the dollar, its lowest in more than a year. It has shed nearly 6 percent since Donald Trump's victory in the US presidential election on Nov. 8, making it Asia's worst performing currency.
Weakness in the ringgit, the currency that palm oil is traded in, usually makes the tropical oil cheaper for foreign buyers.
Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange closed 0.82 percent higher at 2,952 ringgit ($664.86) a tonne.
Traded volumes stood at 22,201 lots of 25 tonnes each.
Palm oil futures gained mainly from a weaker ringgit, traders based in Kuala Lumpur said.
"The market could also be anticipating positive outlook from the Indonesian Palm Oil Conference," said a trader. Industry analysts will share their price forecasts at the conference on Thursday.
"The same speakers from a recent conference are speaking there, and they had been bullish about the market. Assuming no changes to their viewpoint, people should be looking at the market positively," the trader added.
Another trader said expectation of lower production in November could have contributed to the positive sentiment as well. Year-end monsoon rains typically impact palm output.
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 soybean oil contract on the Chicago Board Of Trade fell 0.44 percent, while the January soybean oil contract on the Dalian Commodity Exchange dipped 0.18 percent.
In related vegetable oils, the January contract for palm olein on the Dalian Commodity Exchange was down 0.74 percent.
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