Palm oil jumps to two-month top as ringgit, rupiah weaken

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KUALA LUMPUR (Sept 4): Malaysian palm oil futures rose to a two-month high in early trade on Tuesday, in line for a third straight session of gains, as the Malaysian ringgit and the Indonesian rupiah weakened and related edible oils gained.

A weaker ringgit, palm oil's traded currency, makes it cheaper for holders of foreign currencies. The ringgit fell 0.2% to 4.1340 against the dollar around noon on Tuesday, its weakest levels since Nov 22.   

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 0.8% at 2,277 ringgit (US$550.80) a tonne at midday break.

It earlier rose as much as 1.1% to 2,282 ringgit, its strongest levels since July 9.

Trading volumes stood at 12,866 lots of 25 tonnes each at noon.

"Palm opened higher taking cues from gains in competing vegetable oils. Malaysia's ringgit and Indonesia's rupiah are also both weak," said a futures trader in Kuala Lumpur.

Indonesia is the world's largest producer and exporter of palm oil. It's currency fell 0.6% to 14,897 against the dollar on Tuesday, its weakest levels in a decade.

In other related oils, the Chicago December soybean oil contract was up 0.3%, while the January soybean oil contract on China's Dalian Commodity Exchange jumped 1.6%. 

The Dalian January palm oil contract surged 2.1%.  

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

Palm oil may rise to 2,322 ringgit per tonne in a week, as suggested by its wave pattern and a projection analysis, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
    
 Palm, soy and crude oil prices at 0455 GMT   

Contract Month Last Change Low High Volume
MY PALM OIL SEP8 2228 +19.00 2215 2228 30
MY PALM OIL OCT8 2254 +14.00 2252 2259 1980
MY PALM OIL NOV8 2277 +19.00 2270 2282 6887
CHINA PALM OLEIN JAN9 4950 +90.00 4894 4962 365474
CHINA SOYOIL JAN9 5868 +92.00 5818 5878 310266
CBOT SOY OIL DEC8 28.86 +5.80 28.7 29 4547
INDIA PALM OIL SEP8 606.50 +5.80 601.40 606.8 354
INDIA SOYOIL SEP8 744 +3.60 741.5 744.5 3480
NYMEX CRUDE OCT8 70.06 +0.26 69.53 70.21 162599

 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
 
(US$1 = 4.1340 ringgit)
(US$1 = 71.1850 Indian rupees)
(US$1 = 6.8201 Chinese yuan)