Palm set for first gain in a week, buoyed by weaker ringgit

KUALA LUMPUR: Malaysian palm oil futures were on Tuesday set for their first daily gain in a week, supported by a weaker ringgit.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 0.4 percent at 2,677 ringgit ($631.59) a tonne at the midday break, on course for the first gain after four losing sessions. It earlier fell to its lowest in 1-1/2 months at 2,653 ringgit.

Traded volumes stood at 13,829 lots of 25 tonnes each at the midday break.

"The market is oversold and the ringgit slumped to a four-week low, so we are seeing some technical buying," said a futures trader in Kuala Lumpur, declining to be identified as she was not authorised to speak with media.

"It may hold for today if the ringgit stays weak and soyoil doesn't drop much," added the trader, referring to soyoil on the Chicago Board of Trade (CBOT).

A weaker ringgit typically supports the tropical oil by making it cheaper for buyers holding foreign currencies.

The ringgit fell as much as 0.3 percent to 4.2425 against the dollar on Tuesday morning, its weakest in a month. It was last down 0.2 percent at 4.2385 per dollar.

In other related oils, the December CBOT soybean oil contract edged up 0.1 percent. Palm oil prices are affected by the performance of related edible oils such as soy, as they compete for a share of the global vegetable oils market.

China's Dalian Commodity Exchange is closed for a national public holiday.

Palm oil may bounce to 2,694 ringgit per tonne, as it could stabilise around support at 2,651 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.