Malaysian palm oil price rises after two consecutive weeks of losses

"Lower output in January and short covering are the catalysts behind firmer prices today," said a trader based in Kuala Lumpur. "As February is a short month with long Chinese New Year holidays, major selloffs will be muted temporarily."

KUALA LUMPUR: Malaysian palm oil futures made some gains in Monday trade, rising after two consecutive weeks of losses as a weaker ringgit and improving exports supported the market.

    The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange strengthened 1 percent, registering its strongest gains in three weeks to reach 2,668 ringgit ($680) per tonne at the close of trade. 

    Traded volumes were 50,507 lots of 25 tonnes each, more than a 2015 daily average of 44,600.

    "It's mainly the ringgit propelling the market higher today, said a trader based in Kuala Lumpur. "But exports have also been fairly good."

    The ringgit, the currency palm oil is traded in, fell 0.6 percent against the dollar in trade on Monday evening to reach 3.9250 on tumbling oil prices, as major producers in Qatar failed to come to an agreement to freeze output. 

    A weaker ringgit typically supports palm oil, as it makes the vegetable oil cheaper for foreign currency holders. 

    Palm oil shipments from Malaysia showed rising export demand for the first half of April, even with an export tax in place. Cargo surveyor data showed improving shipments between 7-20 percent from the first half of March, lifted by demand to China and India.  

    Malaysia had raised its crude palm oil export tax to 5 percent for April and May, ending a duty free policy held since May 2015.  

    Palm oil has found support at 2,629 ringgit per tonne and may either hover above this level or rise towards resistance at 2,716 ringgit, according to analysis by Wang Tao, Reuters market analyst for commodities and energy technicals. 

    The September soybean oil contract on the Dalian Commodity Exchange fell 0.3 percent, while the May Chicago Board of Trade soyoil contract rose 0.8 percent.

    The offer price for crude palm kernel oil stood at 4877.71 ringgit per tonne in the evening, according to price assessments by Thomson Reuters. 

  Palm, soy and crude oil prices at 1105 GMT:
 Contract          Month    Last  Change     Low   High   Volume
 MY PALM OIL       MAY6     2654  +29.00    2631   2659      384
 MY PALM OIL       JUN6     2673  +29.00    2645   2675    14162
 MY PALM OIL       JUL6     2668  +27.00    2646   2673    21410
 CHINA PALM OLEIN  SEP6     5582  +30.00    5492   5584  1142056
 CHINA SOYOIL      SEP6     6150  -14.00    6078   6156   795482
 CBOT SOY OIL      MAY6    33.62   +0.30   33.13  33.66    13822
 INDIA PALM OIL    APR6   554.30   +0.30  547.10    556     1081
 INDIA SOYOIL      APR6      646   -2.20     645    647     2180
 NYMEX CRUDE       MAY6    38.93   -1.43   37.61  39.55   121275
 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 = 3.9250 ringgit)
($1 = 66.5700 Indian rupees)
($1 = 6.4782 Chinese yuan)
- Reuters
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