KUALA LUMPUR: Malaysian palm oil futures rose on Friday, recording their first weekly gain in five and their biggest since late April, as a weaker local currency spurred buying interest for the ringgit-denominated palm feedstock.
The Malaysian ringgit was at 3.2090 per dollar
after having slid 1.1 percent this week, as caution mounted
ahead of the U.S. jobs data, making margins more attractive for
overseas investors and refiners.
"Today the prices followed the further weakness in the
ringgit," said a trader with a local commodities brokerage in
Malaysia.
Palm prices also faced a bout of technical correction,
traders said.
"For the past 2-3 times, whenever prices went to the 2,250
ringgit level, the market was unable to close below that level
and always bounced back. So now, technically, prices are
bouncing back to test the 2,290-2,295 ringgit level," the trader
added.
The benchmark October contract on the Bursa
Malaysia Derivatives Exchange had inched up 1.2 percent to 2,283
ringgit ($711) per tonne by Friday's close, gaining 0.8 percent
this week.
Total traded volume stood at 44,186 lots of 25 tonnes, above
the usual 35,000 lots.
Technicals showed that Malaysian palm oil is expected to
test a resistance at 2,298 ringgit per tonne, a break above
which will lead to a further gain to 2,328 ringgit, according to
Reuters market analyst Wang Tao.
But a dip in global demand towards the end of July, after a
strong surge in overseas sales earlier in the month, crimped
gains and made investors cautious of bigger inventories in the
world's No.2 producer.
Cargo surveyor Intertek Testing Services put shipments of
Malaysian palm oil products 2.8 percent lower in July than in
June, due to smaller purchases from China.
"We had anticipated exports to be higher in July," the
Malaysia-based trader added. "Because of the fall in exports,
stocks may be higher than what the market had expected."
Stocks in Malaysia stood at 1.66 million tonnes at end-June.
Another cargo surveyor will release data for the same period
on Monday.
In competing vegetable oil markets, the U.S. soyoil contract
shed 0.3 percent in late Asian trade, while the most
active soybean oil contract on the Dalian Commodities
Exchange fell 0.7 percent.
In other markets, Brent crude oil fell below $106 a barrel
as oversupply in the Atlantic basin and low demand outweighed
worries over political tensions in the Middle East, North Africa
and Ukraine.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 2350 +22.00 2332 2351 76
MY PALM OIL SEP4 2316 +33.00 2285 2317 3305
MY PALM OIL OCT4 2283 +26.00 2261 2287 21290
CHINA PALM OLEIN JAN5 5656 +0.00 5636 5660 295872
CHINA SOYOIL JAN5 6416 -42.00 6414 6472 225496
CBOT SOY OIL DEC4 36.29 -0.11 36.22 36.48 3005
NYMEX CRUDE SEP4 97.21 -0.96 97.15 98.10 26432
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
- Reuters
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