Palm oil gains, tracking stronger crude, soyoil

KUALA LUMPUR (July 17): Malaysian palm oil futures reversed early losses to end higher on Wednesday evening, supported by a weaker ringgit and tracking gains in crude oil and soyoil on the Chicago Board of Trade (CBOT).

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.4% at 1,981 ringgit (US$481.70) per tonne at the close of trade.

“The market rose, tracking crude oil and CBOT soyoil that recovered, as well as on a weaker ringgit,” said a futures trader based in Kuala Lumpur.Advertisement

The ringgit, palm’s currency of trade, fell 0.1% against the dollar to 4.1125 on Wednesday evening, though it was still trading at three-month highs. A weaker ringgit makes the edible oil cheaper for foreign buyers.  

Meanwhile, oil prices regained little ground lost in the previous session, weighed down by industry data suggesting U.S. crude inventories fell less than expected.

U.S. soyoil prices were last up 0.4% on Wednesday, while the September soyoil contract on the Dalian exchange fell 0.3%. 

Meanwhile, the Dalian September palm oil also slid 0.6%.Palm oil prices are affected by movements in related oils that compete for a share of the global vegetable oils market.                   

 (US$1 = 4.1125 ringgit)

Source : The Edge Markets