Malaysian crude palm oil futures rose to more-than-a-month high on Tuesday, tracking a rally in US soybeans on investor concern that hot, dry weather in South America could hurt production. A weaker ringgit currency against the US dollar also raised demand prospects for crude palm oil as the ringgit-priced feedstock now seems cheaper, helping the vegetable oil erase earlier losses to trade marginally higher this year.
"External factors are still uncertain and we will have to look at export numbers to see if the market will breach 3,200 ringgit," said a trader with a foreign commodities brokerage in Kuala Lumpur, referring to Malaysian export data for February 1-15 which will be released on Wednesday.
Benchmark April palm oil futures on the Bursa Malaysia Derivatives Exchange settled up 1.2 percent to 3,205 ringgit ($1,053), a level last seen on January 12. Traded volumes stood at 25,490 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.
Reuters market analyst Wang Tao took a bullish view, saying palm oil is expected to rise to 3,196 ringgit per tonne based on chart analysis. The market is watchful of weak demand for Malaysian crude palm oil as the feedstock is now selling at a steeper discount to futures prices, traders said. Cargo surveyors are set to issue February 1-15 Malaysian palm oil exports on Wednesday after reporting single digit declines in the first ten days of this month.
The US soyoil contract for March delivery was slightly down 0.2 percent in Asian trade after an earlier rally, driven by concerns of dryness in Brazil that could further damage the soy crop. The most active September 2012 soyoil contract on China's Dalian Commodity exchange ended flat.
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