KUALA LUMPUR: Malaysian palm oil futures rose in early trade on Wednesday and looked set for a second consecutive session of gains after closely watched output and export data released during the midday break was in line with bullish expectations.
The market was also supported by a weaker ringgit, the tropical oil's traded currency, as this makes it cheaper for foreign buyers. The ringgit fell 0.2 percent against the dollar around noon.
Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange was up 1 percent at 3,128 ringgit ($704) a tonne at the midday break. Earlier in the session, they hit 3,133 ringgit, their strongest since Dec. 7.
Traded volumes stood at 19,590 lots of 25 tonnes each.
"The market is up on the ringgit, which weakened against the US dollar," said a futures trader from Kuala Lumpur.
Forecasts for bullish data from the Malaysian Palm Oil Board (MPOB) also supported palm, another trader said.
The November data showed a sharper-than-expected decline in production, down 6.1 percent to 1.57 million tonnes, while inventories rose 5.1 percent to 1.66 million tonnes.
Exports fell 4.2 percent to 1.37 million tonnes, but were still stronger than the near 10 percent decline forecast in a Reuters poll.
In related edible oils, the January soybean oil contract on the CBOT was up 0.2 percent, while the May soybean oil contract on the Dalian Commodity Exchange fell 0.7 percent.
The May contract of palm olein on the Dalian Commodity Exchange was down 0.4 percent.
Palm oil prices track the movements of related vegetable oils, as they compete for a share in the global edible oils market.
Comments
Comments are closed for this article.