Malaysian palm oil futures rose for a third day in strong trading on Tuesday after a jump in crude oil prices overnight and gains in competing vegetable oil markets. A stronger ringgit had little impact. By Tuesday's close, the benchmark November palm oil contract on the Bursa Malaysia Derivatives exchange was up 1.1 percent at 2,009 ringgit ($482), after trading in a range between 1,973 and 2,019 ringgit.
Total traded volume on Tuesday was high, at 63,004 lots of 25 tonnes each, compared to the usual daily average of 35,000 lots. "Palm is up purely on the back of external market factors," a trader at a foreign commodities brokerage in Malaysia said, referring to the 8 percent gains in crude oil prices overnight and increases in vegetable oil contracts on China's Dalian Commodity Exchange.
"It's pretty strong," the trader said. A more than 1 percent rise in the Malaysian ringgit, which benchmark palm is priced in, on Tuesday was having no impact on palm oil prices. "I think it has no bearing," the trader said, adding that recent export data was also having little impact. Exports of Malaysian palm oil products fell 1.2 percent in August to 1,525,389 tonnes, from 1,543,868 tonnes shipped during July, cargo surveyor Intertek Testing Services said on Monday.
However, another surveyor, Societe Generale de Surveillance, said Malaysia's palm exports over the same period rose 0.2 percent to 1,542,017 tonnes, from 1,539,583 tonnes shipped during July. Wang Tao, a Reuters market analyst of commodities and energy technicals, said palm oil could fall to 1,936 ringgit per tonne, as it has failed to break a resistance at 1,981 ringgit. In competing vegetable oil markets, the most active January soybean oil contract on the Dalian Commodity Exchange was flat in late Asian trade, while Dalian palmoil for January was up 0.42 percent. The US December soyoil contract was down 1.31 percent.