Malaysian palm oil rose on Wednesday on the back of a weaker ringgit, but continued to trade in a range for a fourth consecutive session. The benchmark January palm oil contract on the Bursa Malaysia Derivatives Exchange gained 0.9 percent to reach 2,343 ringgit ($549.36) a tonne at the end of the trading day. It has been trading within a range since Friday, but hit a two-week low of 2,260 ringgit on Tuesday.
"The market's behaviour is difficult to understand today. Soyoil is low and exports to date are not impressive," said a Kuala Lumpur-based trader, explaining that such factors should be weighing the market down. "The only upshot is the ringgit factor." Traded volume stood at 55,979 lots of 25 tonnes each, well above the average 35,000 lots usually traded in a day.
The ringgit lost 0.1 percent against the dollar on Wednesday as the local stock market continued to underperform. A weaker ringgit usually supports palm prices, as it makes the vegetable oil cheaper for overseas buyers holding other currencies. Palm oil may retest support at 2,264 ringgit per tonne, as it has failed to break a resistance at 2,328 ringgit. A rise to 2,331 ringgit could confirm a break above 2,328 ringgit, and target 2,350 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao. In other vegetable oil markets, the US December soyoil contract was up 0.6 percent while the January soybean oil contract on the Dalian Commodity Exchange lost 0.1 percent.
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