KUALA LUMPUR: Malaysian palm oil futures climbed to a one-week top in early trade on Wednesday before paring some gains, charting a third consecutive day of gains as it tracked an increase in US soyoil on the Chicago Board of Trade (CBOT) and a weaker ringgit.
The ringgit, palm’s currency of trade, on Wednesday, eased to its weakest levels against the dollar since end-December.
It was last down 0.1pc to 4.1730.
A weaker ringgit supports palm oil by making it cheaper for foreign buyers.
Benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.7pc at 2,029 ringgit ($486.22) a tonne at the close of trade on Wednesday.
It earlier rose as much as 1.8pc to 2,050 ringgit, its strongest levels since May 8.
“The market is tracking the overnight recovery in CBOT and further weakness in the ringgit today extended the technical pullback,” said a Kuala Lumpur-based futures trader.
“Expectations of higher exports and negative growth for production also added strength to the market.”
Malaysian palm oil shipments rose for May 1-15, between 4-15pc from the corresponding period last month, according to data from three cargo surveyors, Amspec Agri Malaysia, Intertek Testing Services and Societe Generale de Surveillance.
Palm oil output in May is also expected to see declines or smaller monthly growth from April. Data from the Malaysian Palm Oil Board last Friday showed April output fell 1.4pc from the previous month to 1.65 million tonnes.
However, it is the highest for the month since 2015.
Palm oil may test a resistance at 2,034 ringgit per tonne, following its second failure to break a support range of 1,940-1,967 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In related oils, the Chicago July soybean oil contract had gained 1.5pc on Tuesday, in line with soybean’s gains as planting delays in the Midwest crop belt sparked a round of short-covering.
It was last up 1.1pc.
Meanwhile, the May soyoil contract on the Dalian Commodity Exchange was up 0.6pc, and the Dalian May palm oil contract rose 0.8pc.