KUALA LUMPUR: Malaysian palm oil futures rose on Wednesday after closing at a seven-month low in the previous session, buoyed by a weaker ringgit but losses in rival Dalian contracts capped the gains.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 19 ringgit, or 0.51%, to 3,724 ringgit ($827.56) a metric ton by the midday break.
The contract declined to its lowest closing price since Jan. 8 on Tuesday. Malaysian palm oil futures recovered with a double-digit upside after seeing some weakness in the ringgit currency, a Kuala Lumpur-based trader said.
The ringgit, palm’s currency of trade, weakened 0.67% against the dollar, making the commodity less expensive for buyers holding foreign currencies.
Dalian’s most-active soyoil contract fell 1.34%, while its palm oil contract lost 1.58%.
Soyoil prices on the Chicago Board of Trade ticked up 0.03%.
Palm oil tracks the price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
Brent crude futures gained 0.42% to $76.80 a barrel by 0513 GMT.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil inventories in Malaysia are expected to drop in July for the first time after rising for three consecutive months, a Reuters survey showed.
Malaysian palm oil futures easier
Industry regulator the Malaysian Palm Oil Board is scheduled to release its monthly palm oil data on Aug. 12.
Palm oil is expected to bounce towards 3,784 ringgit per metric ton, as it has found support in the zone of 3,671 ringgit to 3,704 ringgit, Reuters technical analyst Wang Tao said.