Malaysian palm oil hits over seven-week high

Malaysian palm oil futures rose almost 3 percent on Monday, hitting highest in more than seven weeks, supported by speculative buying ahead of export data and firmer soyabean prices. The benchmark November palm oil contract on the Bursa Malaysia Derivatives Exchange ended 2.8 percent higher at 2,193 ringgit ($509) a tonne. Earlier, palm touched 2,196 ringgit, its highest level since July 23, and prices have now added 10 percent this month.
Traded volume stood at 50,434 lots of 25 tonnes each, above the average 35,000 lots usually traded at the end of the session. "The market is pretty strong," said a Kuala Lumpur-based trader. "People are worried about the haze ... It will slow down production. Bean oil is marginally higher." In competing vegetable oil markets, the most active January soyabean oil contract on the Dalian Commodity Exchange was down 0.3 percent in late Asian trade, while the US December soyaoil contract was up 1.2 percent.
Ahead of cargo surveyors' data on Malaysia's September 1-15 palm oil exports due on Tuesday, speculative buying had entered the palm market, the trader added. Many palm plantation areas in dominant Southeast Asia are also currently affected by the annual haze caused by slash and burn forest clearing, which traders say may hinder harvesting short-term. A weak Malaysian ringgit, which makes palm cheaper for offshore buyers, has also offered limited support to palm oil in recent weeks.
The ringgit has lost almost 19 percent so far this year, and is emerging Asia's worst performing currency. Palm oil may rise more to 2,244 ringgit per tonne, as it has more or less broken resistance at 2,171 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao. In related markets, crude oil fell as weaker-than-expected Chinese data weighed on markets, adding to concerns that declining global demand would exacerbate a surplus of crude. Palm oil often takes price direction from crude oil as vegetable oils are increasingly used in making renewable fuels.