business
Palm oil gains tracking competing vegetable oils
Palm oil rises for a second day, however still capped by stronger ringgit. – Reuters pic, March 4, 2016.Malaysian palm oil futures rose today tracking competing vegetable oils and was poised to gain for a second consecutive day, although upsides were seen capped by a stronger ringgit.
The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.7% at RM2,518 (US$610) per tonne at the midday break.
Palm was trending largely lower this week, falling for two sessions and hitting a one-month low of RM2,470 on a stronger currency before reversing course to gain at close of trade yesterday.
Traded volume stood at 19,342 lots of 25 tonnes each today.
"Soybean oil closing was firmer yesterday, which expanded to this morning. The sentiment is more supportive today," said a trader based in Kuala Lumpur.
"However the ringgit is still strong, that seems to be the factor to limit palm's upside."
A stronger ringgit, the currency palm oil is traded in, makes the vegetable oil more expensive for holders of foreign currencies. The ringgit hit 4.1270 per dollar around noon on Friday and has risen 2% so far in the week.
Palm oil may test a resistance at RM2,538 per tonne, as it has cleared a lower resistance at RM2,512, said Reuters market analyst for commodities and energy technicals Wang Tao.
In competing vegetable oil markets, the May soybean oil contract on the Dalian Commodity Exchange rose 1%, while the Chicago soyoil contract strengthened 0.4%. – Reuters, March 4, 2016.
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