KUALA LUMPUR: Malaysian palm oil futures were set for a third straight session of gains on Thursday, supported by a weaker ringgit and stronger performing rival oils in early trade.
Palm saw three straight sessions of declines last week as it pulled back from a 4-1/2-year high hit on Dec. 7 at 3,188 ringgit ($714.50) a tonne, but the gains this week have recouped nearly all those losses.
Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange were up 1.6 percent at 3,176 ringgit a tonne at the midday break, after earlier having touched 3,183 ringgit.
Traded volumes stood at 25,151 lots of 25 tonnes each at noon.
"Palm is up mainly on the weaker ringgit," said a trader from Kuala Lumpur, adding that technical buying was also supporting the market.
The ringgit, palm's currency of trade, fell 0.4 percent to reach 4.4620 per US dollar at noon, its weakest in two weeks. A weaker ringgit makes palm oil cheaper for holders of foreign currencies.
The ringgit's weakness follows the dollar's surge to a near 14-year high after the Federal Reserve raised interest rates by 25 basis points. The US central bank also increased the number of projected rate hikes for 2017.
Stronger performing rival oils on China's Dalian Commodity Exchange also aided in palm's gain, said traders, as the weaker yuan provided support.
Palm prices are influenced by other vegetable oils, as they compete for shares in the global edible oils market.
The May soybean oil contract on the Dalian Commodity Exchange rose 0.9 percent, while the May contract for Dalian palm olein surged 2.9 percent.
The January soybean oil contract on the CBOT was up 0.1 percent.
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