Palm oil rises after five sessions of falls on technical correction

Malaysian palm oil futures rose on Thursday after five consecutive sessions of declines on a technical correction, and with support from overnight gains in Chicago Board of Trade (CBOT) soyaoil. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed up 0.2 percent at 2,738 ringgit ($656) a tonne.
Traded volumes stood at 44,665 lots of 25 tonnes each at noon. "I believe the market was oversold, and is now riding on the recovery in overnight CBOT soyaoil," said a futures trader from Kuala Lumpur. "The ringgit's strength continues to cap palm's upside but we're not sure if the ringgit can strengthen further."
Palm declined to its weakest since Oct. 19 on Wednesday as the ringgit hit its strongest in about a year against the dollar. Gains in the ringgit, the currency of trade for palm, usually make the edible oil more expensive for foreign buyers. The ringgit touched a fresh one year-high on Thursday. Palm oil prices are also affected by movements in other edible oils as they compete for a share of the global vegetable oils market.
The December soyabean oil contract on the Chicago Board of Trade surged over 2 percent in the previous session on reports of strong demand. It was down 0.06 percent on Thursday. US soyabean processors accelerated their crush pace in October to the fifth highest on record and second highest ever for the month, the National Oilseed Processors Association said on Wednesday.
In other related edible oils, the January soyabean oil contract on the Dalian Commodity Exchange declined 0.2 percent, while the January palm olein contract was down 0.3 percent. The palm oil may consolidate in a range of 2,729-2,761 ringgit per tonne, said Reuters technical analyst Wang Tao.