Malaysian palm oil futures rose for a second trading day to a one-week high on Tuesday, tracking competing vegetable oils, after suffering losses in the previous two weeks. The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,688 ringgit ($692) per tonne. It earlier rose to an intraday high of 2,696 ringgit, the highest since April 11.
Traded volumes were 50,335 lots of 25 tonnes each, versus the 2015 daily average of 44,600. Palm tracked the Dalian market and the Chicago Board of Trade higher, a trader based in Kuala Lumpur said. The market was adjusting to the stronger ringgit, the currency palm is traded in, which has risen against the dollar since early April, the trader added.
"Export figures tomorrow will be interesting given that the ringgit strengthened during the last five days." Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance are scheduled to release export data for April 1-20 on Wednesday. Malaysian shipments for the first half of April had improved from the corresponding period last month, helped by demand from China and India.
Benchmark palm oil prices had reached a two-year high at the end of March as the market went long over concerns of weaker output due to a crop damaging El Nino. March production in Indonesia, the world's top palm producer, is expected to fall to a 13-month low as the dry weather phenomenon hurts yields and lowers output. Palm oil is expected to test a resistance at 2,716 ringgit per tonne, a break above which could lead to a gain to the next resistance at 2,776 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
The September soybean oil contract on the Dalian Commodity Exchange gained 1.4 percent, while the May Chicago Board of Trade soyoil contract rose 1 percent. The offer price for crude palm kernel oil stood at 4960.38 ringgit per tonne at noon, according to price assessments by Thomson Reuters.
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