KUALA LUMPUR: Malaysian palm oil futures ended higher on Wednesday, tracking buoyant soy oil and crude oil prices, and prompting short covering among traders.
The benchmark palm oil February contract on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,644 ringgit ($643.31) a tonne.
Traded volume stood at 41,364 lots of 25 tonnes each.
"There is a technical rebound triggered by stronger US soy and crude oil, as the market was earlier oversold. Short covering emerged after ringgit strength fail to spark a further selloff," said a trader in Kuala Lumpur.
"Crude oil is holding well, challenging a previous high and the market is discounting the fact that palm dropped around 250 ringgit in the last week and a half, so there is some short covering among traders," another Kuala Lumpur-based trader said.
US light crude hit a 2-1/2-year high of $57.98 a barrel after faults on a major pipeline dented Canadian deliveries to the United States.
The most-active soybean oil contract on the Chicago Board of Trade was up 0.7 percent, while Dalian Commodity Exchange soybean oil rose 0.4 percent. Dalian palm olein however, fell 0.1 percent.
Palm futures rose sharply despite a continuing rally in the ringgit. The ringgit has risen to 13-month highs following positive domestic economic growth data. The currency was up 0.68 percent to 4.1100 against the dollar.
A stronger ringgit typically makes palm less attractive to buyers holding other currencies.
Earlier this week, palm futures took a hit after India's decision to raise the tax on crude palm oil imports, suffering the largest one-day loss in eight months on Monday, and sliding to its weakest since Aug. 16 on Tuesday.
On technicals, Wang Tao, a Reuters commodities and energy market analyst, said palm may hover around a support level at 2,606 ringgit per tonne or bounce towards a resistance at 2,661 ringgit.
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