Palm gains on stronger rival soyoil

KUALA LUMPUR: Malaysian palm oil futures rose in early trade on Monday tracking stronger performing rival oilseed soy and other related edible oils, while stronger export data over the weekend provided support.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 1 percent at 2,527 ringgit ($573.93) a tonne at the midday break.

Palm earlier fell on a stronger ringgit and tracking weaker rival oils. It was last down 4 percent on-week, its sharpest weekly decline since February 17.

Traded volumes stood at 24,486 lots of 25 tonnes each at noon.

"Palm is tracking gains in the soybean oil market," said a futures trader from Kuala Lumpur, referring to soyoil on the Chicago Board of Trade and China's Dalian Commodity Exchange.

Palm oil prices track the movements in rival edible oils as they compete for a share in the global vegetable oils market. Soyoil and soybean prices rose to an over two-week high on Monday, gaining on forecasts that heavy rains in parts of the US will see a planting delay.

Soybean oil on the Chicago Board of Trade was up 0.7 percent, while the September soybean oil contract on the Dalian Commodity Exchange rose 0.9 percent.

Stronger export demand ahead of Ramadan also supported the market, according to traders.

Shipments from Malaysia, the world's second-largest producer after Indonesia, rose 15 percent in the first half of April from the same period last month, showed data from cargo surveyor Intertek Testing Services on Saturday.

The month-long Muslim festival of Ramadan, which begins end-May this year, involves day-long fasts followed by communal feasting. This pushes up palm oil usage for cooking purposes in regions such as India, Pakistan and the Middle East.

Palm oil is expected to test a support at 2,538 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.