Malaysian palm oil futures rose to a seven-week high in trade on Wednesday evening, extending gains into a fourth session, on support from a weaker ringgit. Weakness in the ringgit, palm's currency of trade, usually makes the tropical oil cheaper for foreign buyers. The Malaysian currency fell 0.2 percent against the dollar to 3.9150 on Wednesday evening, after hitting to its weakest in two weeks earlier in the day.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at 2,559 ringgit ($653.64) a tonne at the close of trade. It has gained 2.6 percent in February, after three straight monthly declines.
Trading volumes stood at 39,277 lots of 25 tonnes each at on Wednesday evening. "The market is still in sideways range, it is mostly the weak ringgit contributing to palm's upside today," said a Kuala Lumpur-based futures trader.
Palm oil prices have been trading in a range this week, tracking movements in other edible oils, and ahead of the release of data from cargo surveyors and an industry conference next week, where leading analysts are scheduled to speak. Another trader added that recent rains have been affecting output levels, especially in Indonesia, providing support to prices. "Crude palm oil prices in Indonesia are firm," he said.
Palm oil prices are impacted by movements in rival edible oils as they compete for a share in the global market. The Chicago Board of Trade's May soyabean oil contract rose 0.4 percent, while the May soyabean oil on China's Dalian Commodity Exchange was up 0.5 percent. The Dalian May palm oil contract was up 1 percent.
Palm oil looks neutral in a range of 2,537-2,562 ringgit per tonne, and an escape could suggest a direction, according to Reuters market analyst for commodities and energy technicals Wang Tao.
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