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Palm rebounds to break 3-week high as rival oils gain
[KUALA LUMPUR] Malaysian palm oil futures rebounded from losses made in early trade, rising to a three and a half week high on Friday evening as better performing rival oils lent support to palm prices, despite a stronger ringgit.
A stronger ringgit usually makes palm oil more expensive for holders of foreign currencies, weighing on palm oil prices. The ringgit rose 0.1 per cent against the dollar on Friday evening, rebounding from a three-month low reached in a previous session to reach 4.1440.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 0.9 per cent to reach RM2,666 (S$884) per tonne at the close of trade. It earlier reached an intraday and three and a half week high of 2,674 ringgit, matching the strongest levels on May 12.
Traded volumes stood at 46,578 lots of 25 tonnes each in the evening, compared with the 2015 average of 44,600.
Palm also recorded a weekly rise of 4.1 per cent, a second consecutive week of gains after two earlier weeks of losses.
"Palm rose on overseas strength, which triggered technical buying when the market failed to ease lower in the afternoon session," said a Kuala Lumpur-based trader, referring to other vegetable oils that impact palm's performance.
"The Dalian's afternoon performance gave palm the boost," commented another trader on the Dalian Commodity Exchange.
The Chicago Board of Trade soyoil contract for July gained 0.9 per cent, while the September soybean oil contract on the Dalian Commodity Exchange rose 2.6 per cent.
The most actively traded September contract for palm olein on the Dalian Commodity exchange gained 1.9 per cent on Friday evening.
The offer price for crude palm kernel oil stood at 5,324.14 ringgit per tonne PKO-MYSTH-M1 in the evening, according to price assessments by Thomson Reuters.