Malaysian palm oil futures snapped a four-day losing streak on Monday, buoyed by a weaker ringgit and tracking competing vegetable oil markets in spite of government data showing local stockpiles at an all-time high. The benchmark December palm oil contract on the Bursa Malaysia Derivatives exchange gained 1.9 percent to close at 2,259 ringgit ($546.18) a tonne at the end of Monday's trading session, edging up from a two-and-a-half-week low.
"The (stocks) data was within market expectations. What's more important than end stocks is the ringgit ... overnight Chicago and Dalian are also trading higher," said a trader with a local commodities firm based in Kuala Lumpur. "Export numbers don't look very good, so it might cap the rally," the trader added.
Traded volume stood at 39,122 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day. Data from the Malaysian Palm Oil Board showed September stockpile levels at an all-time high, while production slowed from August. Exports of Malaysian palm products for October 1-10 fell 11.25 percent from the same time period a month ago, said cargo surveyor Intertek Testing Services on Saturday.
A weaker ringgit helped boost palm prices, dipping to 4.1360 against the dollar on Monday. The ringgit, emerging as Asia's worst performing currency so far this year, rose more than 3 percent on Friday to reach near two-month highs on easing rate hike expectations by the Federal Reserve. Palm oil may rise to 2,349 ringgit, as it has stabilised around a support at 2,234 ringgit per tonne, said Reuters market analyst for commodities and energy technicals Wang Tao. In competing vegetable oil markets, the US December soyoil contract gained 1 percent, while the January soybean oil contract on the Dalian Commodity Exchange rose 2.4 percent.
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