Malaysian palm oil futures jumped on Monday to their highest in a week, tracking gains in rival soyaoil, although firmness in ringgit capped the upside. The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed up 1.2 percent at 2,537 ringgit ($621.81) per tonne. Palm earlier rose to 2,543 ringgit, the highest since February 29.
"Palm oil has been getting good support from a rebound in crude oil and soyaoil prices," said a Kuala Lumpur-based trader. "The strengthening Malaysian ringgit is limiting the upside." The Malaysian currency firmed 0.75 percent versus the dollar, making the tropical oil which is priced in the ringgit expensive for holders of other currencies.
Traded volume stood at 21,165 lots of 25 tonnes each, significantly below 42,774 lots traded on Friday. "Volumes were thin since people want to know what key analysts and producers say in the conference," said the trader, referring to the Palm and Lauric Oils Outlook Conference in Kuala Lumpur from March 7 to March 9.
Palm oil may break a resistance at 2,538 ringgit per tonne, and rise into a range of 2,559-2,580 ringgit, said Wang Tao, Reuters market analyst for commodities and energy technicals. In competing vegetable oil markets, the May soyabean oil contract on the Dalian Commodity Exchange rose 1.27 percent, while the Chicago soyaoil contract rose 0.42 percent.
Oil prices jumped on Monday, extending a rally that has lifted crude benchmarks by more than a third from this year's lows, as tightening supply and an improving global outlook strengthened the sentiment for a market recovery. "Rebound in crude oil can help palm oil producing countries like Indonesia in increasing biofuel usage," said another Kuala Lumpur-based trader.
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