Palm edges up on demand, but trade seen subdued

KUALA LUMPUR: Malaysian palm oil futures rose slightly in early trade on Monday, supported by demand and a weaker ringgit, although public holidays in China and India, the top two buyers of the tropical oil, kept trade subdued.

Palm oil shipments from Malaysia for the full month of September rose 10.4 percent from August, according to data from cargo surveyor Intertek Testing Services on Saturday.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,700 ringgit ($638.45) a tonne at the midday break, in line for the first gain in four sessions.

Traded volumes stood at 14,298 lots of 25 tonnes each at the midday break on Monday.

"It looks like demand is supporting the market," said a Kuala Lumpur based futures trader.

Palm prices could decline "mirroring listless movement in rival oilseeds," said a second trader, although a weaker Malaysian ringgit may cushion any selling. Price moves were likely to be limited, he added.

A weaker ringgit, palm's traded currency, typically supports the tropical oil by making it cheaper for buyers holding foreign currencies.

The ringgit weakened 0.2 percent around noon on Monday at 4.2290 against the dollar.

Palm oil prices are affected by the performance of related edible oils such as soy, as they compete for a share of the global vegetable oils market.

The December soybean oil contract on the Chicago Board of Trade was down 0.2 percent. China's Dalian Commodity Exchange is closed for a national public holiday.

Palm oil may break a support at 2,694 ringgit per tonne and fall more to the next support at 2,651 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.