Palm edges up on soyoil gains, weaker ringgit

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KUALA LUMPUR (July 31): Malaysian palm oil futures edged up slightly on Tuesday, recovering from a one-week low hit earlier in the day, supported by gains in U.S. soyoil and a weaker ringgit.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.1% at 2,194 ringgit a tonne at the end of the trading day. It earlier hit 2,176 ringgit, its lowest since July 25.

Palm oil has declined 5.7% this month, its sharpest monthly drop since November.

Trading volume stood at 52,227 lots of 25 tonnes each on Tuesday evening.

"The market was supported by soyoil on the Chicago Board of Trade and then the ringgit turned lower," said a Kuala Lumpur based trader, adding that technical buying also supported the market.

A weaker ringgit, the currency palm is traded in, typically supports prices by making it cheaper for foreign buyers. The ringgit weakened 0.2% to 4.0630 to the dollar on Tuesday evening.

Palm prices had fallen earlier, tracking overnight losses in U.S. soyoil and on weak export data from a cargo surveyor.

Palm oil exports in July fell 3.9% on a monthly basis, inspection company AmSpec Agri Malaysia reported on Tuesday.

In other related oils, the Chicago December soybean oil contract declined 0.6% on Monday, but was up 0.7% on Tuesday.

The September soybean oil contract on China's Dalian Commodity Exchange rose 0.6v and the Dalian September palm oil contract fell 0.1%.

Palm oil prices are influenced by the performance of other edible oils, as they compete for a share in the global vegetable oils market.

(US$1 = 4.0580 ringgit)
(US$1 = 68.6125 Indian rupees) 
(US$1 = 6.8204 Chinese yuan)