KUALA LUMPUR: Malaysian palm oil futures jumped more than 3 percent on here the other day to their highest in nearly two weeks as the ringgit slid and overseas soyoil markets tracked by palm underpinned sentiment.
The benchmark July contract on the Bursa Malaysia Derivatives
exchange rose as much as 3.1 percent to 2,168 ringgit ($601) a tonne, its
highest since April 24, on reopening after a long weekend. It settled at 2,156
ringgit, up 2.6 percent, by the day’s close.
After strong gains last week, the Malaysian ringgit slumped on
Tuesday, touching 3.6100 per dollar, which helped stoke buying interest from
overseas palm investors. The currency was down 1.4 percent at 3.6090 by 1026
GMT, marking its biggest intraday drop in nearly five months.
“Previously, the market was under pressure because the ringgit went up so
much… but people’s idea is that the ringgit will not stay strong for so
long,” said a trader with a foreign commodities brokerage in Kuala Lumpur.
“Palm prices will find a new balance – they will move up to a slightly
higher level because soy has also gone up quite a bit.”
The U.S. July soyoil contract rose 0.2 percent in late Asian trade,
while the most active September soybean oil contract on the Dalian
Commodity Exchange gained 1.9 percent.
The rally in soyoil, which stemmed from talk of rising demand on the export
market and increased appetite for the vegetable oil, also drove up U.S. soybean
futures to $9.79-1/4 a bushel.
Palm oil typically tracks soyoil, a common food and fuel rival.
Total traded volume on Tuesday stood at 49,664 lots of 25 tonnes each,
higher than the usual 35,000 lots.
Technicals, however, painted a bearish outlook. Palm oil is expected to fall
to 2,114 ringgit per tonne, as indicated by its wave pattern and a Fibonacci
projection analysis, according to Reuters market analyst Wang Tao.
