Malaysian palm oil futures rose for the first time in three sessions on Wednesday after tracking rival oils as they climbed on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange. Benchmark palm oil futures for February on the Bursa Malaysia Derivatives Exchange closed 1.5 percent higher at 2,855 ringgit ($657) a tonne.
Traded volumes stood at 51,327 lots of 25 tonnes each, above the 2015 daily average of 44,600 lots. "(CBOT) soyabean oil is seeing some upside, and Dalian also moved higher," said a futures trader based in Kuala Lumpur. The market is undergoing a correction after a few volatile sessions, traders said. Palm climbed to a four-year high of 3,089 ringgit on Friday due to a weaker ringgit, which makes the tropical oil cheaper for foreign currency holders.
The oil then posted its sharpest decline in more than four months on Monday, tracking weaker rivals on the Dalian Commodity Exchange after news of Chinese government measures to curb speculation. Palm prices are affected by the performance of related vegetable oils as they compete for a share in the global edible oils market. The December soyabean oil contract on the CBOT was up 0.6 percent, while the January soyabean oil contract on the Dalian Commodity Exchange rose 1.4 percent.
In other vegetable oils, the January contract for palm olein on the Dalian Commodity Exchange climbed 3 percent. Palm oil has found support at 2,814 ringgit per tonne and it may bounce towards resistance at 2,879 ringgit, according to analysis by Reuters market analyst for commodities and energy technicals Wang Tao.
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