Palm inches up on strong overseas market, weak ringgit

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KUALA LUMPUR (Feb 7): Malaysian palm oil futures rose in the first half of Tuesday, helped by strong external markets and a weak ringgit.

Benchmark palm oil futures for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.1% at RM3,071 (US$692.45) per tonne at the mid-day break. Traded volumes stood at 22,251 lots of 25 tonnes each.

The futures contract opened firmer riding on strong overseas market and technical buying as it moved above last week's high of RM3,085, a Kuala Lumpur-based trader said.

While a slight fall on the Dalian Commodities Exchange led to some profit booking, a weaker ringgit helped offset the sell-off, the trader said. The ringgit fell 0.16% to 4.4340 to the US dollar in early trade.

Weakness in the ringgit, which palm is traded in, makes the tropical oil more attractive to traders holding foreign currencies.

The May contract for Dalian soybean oil slipped 0.06%, while the palm olein contract gained 0.03%.    

Signals are mixed for palm, as the contract approaches a resistance at RM3,089 per tonne again, according to Reuters market analyst for commodities and energy technicals, Wang Tao.

"A break above the resistance could lead to a gain to RM3,169. Even though palm oil has briefly pierced above RM3,089, a valid break could possibly be confirmed when it stands firm above this level," he said.

The market continues to be steady on the back of good fundamentals, said another Kuala Lumpur-based trader.

"Sentiment remains firm as supply is still tight and external markets are holding well. CBOT closed higher last evening," he said.

On the Chicago Board Of Trade, the March soybean oil contract gained 0.15%.   

Palm, soy and crude oil prices at 0452 GMT

Contract                     Month      Last    Change         Low       High       Volume
MY PALM OIL       FEB7          3277    +15.00        3272       3286           70
MY PALM OIL    MAR7          3156     +4.00        3153       3175          522
MY PALM OIL   APR7          3071     +3.00        3066       3094        11005
CHINA PALM OLEIN   MAY7          6146     +2.00        6134       6188       237368
CHINA SOYOIL     MAY7          6866     -4.00        6852       6906       178288
CBOT SOY OIL MAR7         34.48     +1.20       34.44      34.64         3195
INDIA PALM OIL FEB7        579.70     +1.20      579.00        580          151
INDIA SOYOIL  FEB7         704.5     +2.00       703.8      704.7          540
NYMEX CRUDE  MAR7         53.12     +0.11       53.11      53.24        12170

(US$1 = RM4.4340)
(US$1 = 67.35 Indian rupees)
(US$1 = 6.8750 Chinese yuan)