KUALA LUMPUR: Malaysian palm oil futures hit a three-month high on Tuesday,extending gains into a fourth straight session, buoyed by an overnight rally in soyoil markets and a weak ringgit.
The U.S. July soyoil contract climbed almost 8 percent over the last two sessions, lifted
by increased biodiesel targets by the U.S. Environmental Protection Agency - a move that may spur consumption of the edible oil.
Echoing the rise, the August palm oil contract on the Bursa Malaysia Derivatives
exchange rose as much as 2.4 percent to 2,349 ringgit ($635.38) a tonne intraday, its highest since March 5. Prices settled 0.8 percent higher at 2,312 ringgit by the day's close.
Total traded volume stood at 40,716 lots of 25 tonnes each, above the average 35,000 lots.
"The market is rising because of the strength in soybean oil, with the ringgit assisting the
rise," said Chandran Sinnasamy, head of dealing at LT International Futures in Malaysia, adding that palm has entered a new range between 2,250-2,400 ringgit.
"At the moment everything looks supportive. Palm may fall for correction in an overbought chart,but will be well supported between 2,280-2,300 ringgit," he said.
Palm prices, also supported by a drop in the ringgit to seven-week lows, have jumped
more than 10 percent from a trough of 2,121 ringgit reached on May 25. A weak ringgit makes palm a cheaper option for overseas buyers.
Technical charts show palm oil is expected to break resistance at 2,346 ringgit and rise to the next resistance at 2,385 ringgit, driven by an extended wave C, according to Reuters market analyst Wang Tao.
The U.S. soyoil contract was at 34.32 U.S. cents a pound by 1015 GMT, down 0.6 percent, while the most active September soybean oil contract on the Dalian Commodity Exchange was up 1.3
percent.
In other markets, oil prices rose on Tuesday as the dollar weakened and on expectations that
OPEC producers would maintain their group production target at current levels and resist pressure for an increase.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN5 2309 +39.00 2299 2310 39
MY PALM OIL JUL5 2313 +20.00 2311 2347 3734
MY PALM OIL AUG5 2312 +18.00 2312 2349 21915
CHINA PALM OLEIN SEP5 5232 +48.00 5186 5250 933004
CHINA SOYOIL SEP5 5912 +76.00 5878 5950 1041176
CBOT SOY OIL JUL5 34.28 -1.80 34.21 34.60 13684
INDIA PALM OIL JUN5 463.90 -1.80 463.50 468.40 1472
INDIA SOYOIL JUN5 622.85 +0.75 618.00 626.60 29190
NYMEX CRUDE JUL5 60.77 +0.57 60.09 61.18 36492
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.6970 ringgit)
($1 = 6.1984 Chinese yuan)
($1 = 63.86 Indian rupees)
- Reuters
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