Malaysian palm oil futures were headed for a second session of gains on Friday on the back of a weaker ringgit, but the benchmark contract was still set for a weekly fall of around 2 percent. The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.3 percent at 2,544 ringgit a tonne at the close of trade. Traded volume was 19,403 lots of 25 tonnes each.
"The market is up tracking the ringgit today," said a trader based in Kuala Lumpur. "Also we expect some correction after the week-long sell-off." Palm futures fell for five consecutive sessions from February 18 to February 22 on concerns over an unexpected rise in production in the first 20 days of February, but edged up on Thursday on expectations of a stock decline at the end of the month.
The weaker ringgit, the currency palm oil is traded in, also supported the vegetable oil in early trade on Friday. It fell 0.1 percent to 4.2200 against the dollar around noon, making palm oil cheaper for holders of foreign currencies. Palm oil could approach resistance at 2,549 ringgit a tonne as the bounce from the February 24 low of 2,517 ringgit has not been completed, said Wang Tao, a Reuters market analyst for commodities and energy technicals. In competing vegetable oil markets, the May soybean oil contract on the Dalian Commodity Exchange lost 0.1 percent while the Chicago soyoil contract rose 0.6 percent.
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