Tuesday, May 31, 2016
Monday, May 30, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 30 MAY 2016
(May 30): Malaysian palm oil futures rose for a fourth session out of five on Monday, tracking competing vegetable oils and supported by a weaker ringgit.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed up 1.6% at RM2,600 (US$632) per tonne, after reaching its highest in nearly two weeks at RM2,605 earlier in the day.
Traded volumes stood at 41,304 lots of 25 tonnes each, below the 2015 daily average of 44,600.
Palm rose 1.2% last week after two straight weekly losses.
Soyoil was up overnight (Friday) ahead of the US holiday, and there is some ringgit weakness," said a trader in Kuala Lumpur.
US markets were closed on Monday for the Memorial Day holiday.
The September soybean oil contract on the Dalian Commodity Exchange rose 1.7% on Monday, after the Chicago Board of Trade soyoil contract for July gained 1.4% on Friday.
The ringgit was 1% weaker against the dollar at 4.1150.
Palm oil is traded in ringgit and a weaker ringgit makes the tropical oil cheaper for holders of foreign currencies.
Friday, May 27, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 27 MAY 2016
(May 27): Malaysian palm oil futures fell at closing trade on Friday evening, weighed down by a stronger ringgit which triggered some selling, but recorded its first weekly gain in three on expectations of lower-than-expected output and steady Ramadan demand.
The ringgit hit 4.0600 per dollar earlier in the day, its strongest level in more than a week, before settling at 4.0760 on Friday evening.
A stronger ringgit, the currency of trade for palm oil, makes it cheaper for holders of foreign currencies.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange declined 0.8% to reach RM2,558 (US$628) per tonne in the evening, after hitting an intraday low of RM2,555.
Palm has gained for three out of five sessions so far this week and was up 2% on the week, on track for its first weekly gain in three weeks.
It rose 1.4% on Thursday.
Traded volumes stood at 51,908 lots of 25 tonnes each on Friday evening, compared with a 2015 daily average of 44,600.
"The ringgit was stronger in the morning, which started some profit-taking," a trader from Kuala Lumpur said.
"Not helping is the demand side; we are sitting in the month for Ramadan demand now but not seeing much activity."
Another trader added that the market likely fell on technical selling triggered by the stronger ringgit.
Demand for palm oil usually comes in one to two months before Ramadan, which begins in early June this year. The Muslim holy season is a month of fasting and feasting, which sees higher demand for palm oil used in cooking.
Leading up to Ramadan, Malaysian palm oil shipments have gained 8%–11% over May 1–25 from last month, according to cargo surveyor data.
Better demand for palm oil and lower-than-expected output are expected to dent current stockpile levels, supporting benchmark prices
How to trade Crude Palm Oil Futures ( FCPO ) 26 MAY 2016
(May 26): Malaysian palm oil futures rose on Thursday to record a third session of gains this week, amid expectations of slow output growth and sustained Ramadan demand.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 1.4% to RM2,579 (US$632) per tonne in the evening. It earlier reached an intra-day high of RM2,595, its highest in a week.
Palm suffered losses in the last two weeks, impacted by the sell-off in China's commodities markets and hitting a near three-month low on Monday, tracking weak rival Chinese oils.
Traded volumes stood at 45,999 lots of 25 tonnes each at the close of trade, compared with a 2015 daily average of 44,600.
"Production is not going up drastically, and we have seen some growth in demand, which will continue in June," said a trader from Kuala Lumpur.
"While peak demand is a month before Ramadan, it will stay on until mid June."
Better demand for palm oil and lower-than-expected output will dent current stockpile levels, helping to support benchmark prices. Malaysia's palm oil inventories stood at 1.8 million tonnes at the end of April.
While a dry weather El Nino is seen impacting output in top producers Indonesia and Malaysia, an impending La Nina, which brings wet weather across Asia, could reverse the trend. Palm oil production is also set to rise this quarter in line with the seasonal trend.
Wednesday, May 25, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 25 MAY 2016
(May 25): Malaysian palm oil futures rose for a second consecutive day, making their sharpest gains in three weeks and outpacing a stronger ringgit as they track improving rival oils in China.
The ringgit, in which palm oil is traded, strengthened 0.5% to reach 4.1010 against the dollar in the evening, making palm more expensive for foreign currency holders.
Palm prices had earlier recorded two weeks of losses tracking China's commodities sell-off.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 1.7% to RM2,545 (US$620) per tonne at the closing trade, after reaching an intraday high of RM2,547.
Traded volumes stood at 48,464 lots of 25 tonnes each on Wednesday evening, versus a 2015 daily average of 44,600.
"The market most likely rebounded on an oversold situation... And the Chinese markets have stopped dropping," said a trader in Kuala Lumpur, referring to palm's rival vegetable oils on the Dalian Commodity Exchange.
"We may see a buy off tomorrow as most of the Chinese market is up."
Malaysian palm oil shipments rose 8%–11% over May 1–25 compared with the previous month, according to data from cargo surveyors on Wednesday, but traders say double-digit monthly growth is required to support benchmark prices.
"Post Ramadan the market will come down, we really need strong demand then because we will see strong production from June to August," said another trader from Kuala Lumpur.
Tuesday, May 24, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 24 MAY 2016
(May 24): Malaysian palm oil futures recovered from the previous session's near three-month low on Tuesday, supported by a weaker ringgit while gains in
rival oils also boosted sentiment.
rival oils also boosted sentiment.
The contract for August delivery on the Bursa Malaysia Derivatives Exchange had risen 0.4% to 2,503 ringgit (US$608) per tonne at the end of the trading day. It hit its lowest level since March 3 on Monday, dragged down by losses in Chinese vegetable oils.
Traded volume stood at 30,536 lots of 25 tonnes each on Tuesday evening, lower than the 2015 daily average of 44,600.
"The U.S. dollar has strengthened, and markets have recovered a bit on the Dalian," said a trader from Kuala Lumpur, referring to the Dalian Commodity Exchange.
"Nearby tightness on supply also created some buying."
The ringgit lost as much as 1.1% to 4.1290 per dollar, its weakest since March 16, as most Malaysian government bond prices slipped. The currency was down 0.9% at 4.1200 per dollar in the evening, making palm oil cheaper for holders of foreign currencies.
Better performing rival oils on the Dalian Commodity Exchange also boosted prices of Malaysian palm. The most actively traded September contract for palm olein gained 0.4%, while the September soybean oil contract rose 0.3%.
Expectations of lower output in May and early June, due to the impact from a crop-damaging El Nino weather event, also lent support to palm, said the Kuala Lumpur-based trader.
The Australian Bureau of Meteorology said that the strongest El Nino in nearly 20 years that persisted through 2016 is now over.
Monday, May 23, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 23 MAY 2016
(May 23): Malaysian palm oil futures hit their lowest level in nearly three months on Monday, dragged down by losses in Chinese vegetable oils, while a stronger ringgit also weighed on sentiment earlier in the day.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange had fallen 1.4% to RM2,492 (US$610) per tonne by the closing trade, posting its third loss in the past four sessions.
Earlier in the day, the contract fell as much as 2.1% to RM2,475, its lowest since March 3. Last week, palm posted its second consecutive weekly decline, weighed down by the sell-off in Chinese commodities markets.
Traded volumes stood at 52,089 lots of 25 tonnes each on Monday evening compared with the 2015 daily average of 44,600.
"Palm is kept down by external markets, Dalian's RBD (refined, bleached and deodorized) palm olein has continuously been under pressure," said a trader based in Kuala Lumpur.
The most actively traded September contract for palm olein on the Dalian Commodity Exchange dropped 2.2% on Monday.
The ringgit rose on Monday morning before falling slightly by 0.2% to 4.0840 per dollar. A stronger ringgit make palm more expensive for holders of foreign currencies.
In other vegetable oils, the Chicago Board of Trade soyoil contract for August fell 0.8%, while the September soybean oil contract on the Dalian Commodity Exchange dropped 2.4%.
Friday, May 20, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 20 MAY 2016
(May 20): Benchmark Malaysian palm oil futures rose on short-covering on Friday, following two sessions of losses and as surveys showed exports picked up in May, but lost more than 2% on the week, its second straight weekly decline.
Malaysian palm oil shipments rose 6%-9% during May 1-20, lifted by exports to India and Pakistan on demand ahead of the Ramadan festival, data from two cargo surveyors showed on Friday.
The Muslim holy season of Ramadan, which starts in early June this year, entails a month of fasting and feasting. This means demand for palm oil used in cooking is typically higher in palm consuming markets such as India, Pakistan and the Middle East.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 0.3% to 2,527 ringgit (US$620) per tonne at the close of trade, recovering from an intraday low of 2,505 ringgit, which was also a fresh 10-week low for the commodity.
Palm however lost 2.6% this week, a second consecutive weekly loss.
Traded volumes stood at 49,019 lots of 25 tonnes each on Friday, compared with a 2015 daily average of 44,600.
"At current levels the trade is aware that fundamentals remain bullish and will remain so next month with the fasting month," said a trader in Kuala Lumpur.
"Thus the short-covering at current low levels reflects the above scenario."
Thursday, May 19, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 19 MAY 2016
(May 19): Malaysian benchmark palm oil futures fell to a near 10-week low on Thursday evening, as it tracked weaker performing rival oils in China.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange slid 1.6% to RM2,519 per tonne in the evening. It hit an intraday low of RM2,517, its lowest levels since March 8.
Traded volumes stood at 56,751 lots of 25 tonnes each, versus a 2015 daily average of 44,600.
The market likely tracked weaker vegetable oils in China, a Kuala Lumpur trader said, but export data scheduled for release on Friday could lift prices.
"However, single digit export growth will not reduce end-stocks by much."
Palm oil's performance has been impacted by the volatility of China's commodities market in recent weeks. The most actively traded September contract for palm olein and the September soybean oil contract on the Dalian Commodity Exchange both fell 2.4% on Thursday.
Traders also expect the start of Ramadan in early June to lift export demand. The festive month entails fasting and feasting for Muslims around the world, meaning higher demand for palm oil for cooking.
Wednesday, May 18, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 18 MAY 2016
FCPO Strategy UPDATE : BUY AUG17 ONCE BREAK UP 2562, hit and run only.
(May 18): Malaysian benchmark palm oil futures reversed gains to hit a two-week low on Wednesday, as speculation over higher output and technical selling dragged the market lower.
The new palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 1.5% to 2,561 ringgit (US$633) per tonne at the evening close. It earlier dipped to 2,541 ringgit, its lowest since May 4.
Traded volumes stood at 68,295 lots of 25 tonnes each at the end of the trading day, more than the 2015 daily average of 44,600.
"We're seeing a technical sell off, which only happens once the 2,600 ringgit range is broken and profit taking comes in," said a Kuala Lumpur-based trader.
"There could be speculation of better output on the back of massive rains in recent weeks, but rain is subjective to location."
Improving output would weigh down on palm's benchmark prices, which gained nearly 10% in the first quarter of the year, on declining production from a crop-damaging El Nino.
Tuesday, May 17, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 17 MAY 2016
FCPO Strategy UPDATE : BUY AUG17 BELOW 2599, hit and run only.
(May 17): Malaysian benchmark palm oil futures rose on Tuesday, overcoming a stronger ringgit, as demand for the tropical oil ahead of the Muslim festival of Ramadan pushed up prices.
Demand for palm oil usually comes in one to two months before Ramadan, which begins in early June this year. The Muslim festival is a month of fasting and feasting, which sees higher demand for palm oil used in cooking, leading up to Eid.
The new palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was 0.5% higher at RM2,600 (US$647) per tonne in the evening.
Traded volumes stood at 49,902 lots of 25 tonnes each at closing trade, above the 2015 daily average of 44,600.
"Although the ringgit is stronger today, the market is covering for May and June as Ramadan demand is there," said a Kuala Lumpur-based trader.
The Malaysian ringgit rose as crude oil futures held near six-week highs, easing concerns over the country's falling gas and oil revenues. A stronger ringgit, the currency in which palm oil is traded, typically makes it more expensive to buy for foreign currency holders.
"Everyone wants to rush the shipments before Eid. The half a percent rise (in crude palm oil export tax) won't make much of an impact, it's very marginal," the trader said.
Malaysia its raised export tax on crude palm oil to 5.5% for June, a government circular showed on Tuesday. The world's second largest palm oil producer set the export tax at 5% for April and May.
Palm oil shipments rose 14%-16% in the first half of May compared with the same time period a month ago, according to data from cargo surveyors, lifted by rising demand from Europe, Pakistan and India.
Monday, May 16, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 16 MAY 2016
(May 16): Malaysian benchmark palm oil futures rose on Monday as a weaker ringgit spurred buying and data showed exports continued to grow in the first half of May.
The palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was 1.1% higher at RM2,587 (US$643) per tonne at the close of trade.
Traded volumes were 37,951 lots of 25 tonnes each on Monday evening compared with a 2015 daily average of 44,600.
"The ringgit was weaker and exports rose, though at a slower growth rate from before," said a trader based in Kuala Lumpur, referring to export data from a cargo surveyor.
Malaysian palm oil shipments rose 14%–16% in the first half of May compared with the same period a month ago, according to data from Intertek Testing Services and Societe Generale de Surveillance.
Previous export data for the May 1–10 period showed exports had risen 22%–32% from April 1–10.
A weaker ringgit versus the US dollar also supported palm oil prices since as it makes the vegetable oil cheaper for holders of foreign currencies. The ringgit initially fell 0.2% before rising 0.05% against the dollar later.
Friday, May 13, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 13 MAY 2016
(May 13): Asian vegetable oil markets fell on Friday, with futures in China and Malaysia declining by 2%-4%, hit by the effects of a sell-off on China's commodities market.
Malaysian palm oil futures tracked refined, bleached and deodorised (RBD) palm olein on the Dalian Commodity Exchange, falling the most in five months on Friday.
The most actively traded September contract for palm olein and the September soybean oil contract, both on the Dalian Commodity Exchange, fell 4% in Friday's late trade.
"It's all influenced by massive speculation — we see high runs and sharp drops," observed a palm oil futures trader in Kuala Lumpur.
"What happened earlier with China's stock market is now shifting to commodities."
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 2.3% lower at RM2,587 (US$642) a tonne at the close of trade. Traded lots stood at 56,153 lots of 25 tonnes each, versus a 2015 daily average of 44,600.
While this is the market's sharpest drop since it fell 3% on Dec. 15, palm still gained 0.8% this week for a second consecutive weekly gain.
"The market slid on Dalian's RBD (refined, bleached and deodorised) palm olein. Most of the commodity prices are down sharply in China, so our market tagged along with that," another Kuala Lumpur-based trader said.
Crude palm oil futures on the Multi Commodity Exchange of India for May were also dragged down, losing 1%.
China's Dalian Commodity Exchange said on Thursday that it will restore full transaction fees on soybean meal, corn starch, palm oil and soybean oil futures positions that are opened and closed on the same day, among other measures to curb speculative trading behind strong rallies last month.
Thursday, May 12, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 12 MAY 2016
FCPO Strategy UPDATE: BUY BELOW 2646 OR BUY ONCE BREAK UP 2663, hit and run only.
(May 12): Malaysian palm oil futures eased on Thursday evening to see its sharpest drop in a week as it tracked a weaker Dalian palm olein oil and on a slightly stronger ringgit, which led to a downtrend in benchmark prices.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 1.2% lower at RM2,646 (US$659) per tonne at the close of trade, marking palm's second decline out of four sessions this week. Traded volumes were 52,993 lots of 25 tonnes each on Thursday evening, higher than a 2015 daily average of 44,600.
"Dalian RBD (refined, bleached and deodorised) palm oil was down," said a trader based in Kuala Lumpur, which dragged down benchmark palm oil prices.
The most actively traded September contract for palm olein on the Dalian Commodity exchange declined 2.9% on Thursday.
The market also declined on a stronger ringgit, the currency palm oil is traded in. The ringgit strengthened 0.4% to hit 4.0170 per dollar around Thursday evening, making palm oil more expensive for holders of foreign currencies.
Palm however is up 0.6% on a weekly basis, on track for a second straight week of gains.
"Generally this month should be strong for palm oil. As we move into the Muslim holiday, exports should improve," said the trader.
The holy month of Ramadan, which is a period of fasting and feasting for Muslims, begins in early June. The month before Ramadan starts usually sees a higher demand for palm oil for cooking.
Wednesday, May 11, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 11 MAY 2016
(May 11): Malaysian palm oil climbed 0.7% on Wednesday to its highest in almost three weeks, with prices rising for four out of six sessions on strong demand and a rally in soybeans.
Chicago soybeans are trading near a 21-month high, after the U.S. government forecast lower world supplies as adverse weather cuts South American yields and demand from top importer China continues to rise.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.7% at 2,680 ringgit (US$665) per tonne at the evening close.
It earlier reached an intraday high of 2,717 ringgit, its strongest since April 22. Traded volumes were 63,496 lots of 25 tonnes each at the end of the evening session.
"Palm oil exports are very good and we expect further reductions in Malaysian stocks," one Kuala Lumpur-based trader said. "There are weather issues in Argentina which are reducing supplies of soybeans."
Malaysian data on Tuesday showed a 4.5% decline in local stockpiles in April, as output growth was less than expected. Production rose 6.7% from March to 1.30 million tonnes, compared with a 13.2% jump to 1.69 million tonnes in April last year.
Tuesday, May 10, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 10 MAY 2016
(May 10): Malaysian benchmark palm oil futures rose for a second consecutive day as the ringgit weakened and stockpiles declined in the world's second largest palm producer.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 0.2% higher at RM2,668 (US$658) per tonne at the midday break.
It reached an intraday high of RM2,689, its strongest since April 25. Traded volumes were 47,944 lots of 25 tonnes each in the evening, versus a 2015 daily average of 44,600.
"The ringgit was weaker and end-stocks fell," said a trader from Kuala Lumpur, referring to April inventories as shown by government data from the Malaysian Palm Oil Board (MPOB).
The data, which was released at the market break at noon, showed a 4.5% decline in local stockpiles in April as output growth was less than expected. Production rose 6.7% from March to 1.30 million tonnes, compared with a 13.2% jump to 1.69 million tonnes in April last year.
A Reuters poll had forecast Malaysian stockpiles would decline amid slumping production versus a year ago.
Palm was also supported by a weaker ringgit, which fell 1.1% to 4.0530 against the dollar in trade on Tuesday evening. A weaker ringgit, the currency palm oil is traded in, makes the commodity cheaper for holders of foreign currencies.
Monday, May 9, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 9 MAY 2016
FCPO Strategy UPDATE: BUY BELOW 2643 OR BREAK UP 2666, hit and run only.
(May 9): Malaysian benchmark palm oil futures rose on Monday, supported by improved demand and forecasts that stockpiles will drop on falling production ahead of a data release from the Malaysian Palm Oil Board (MPOB).
A Reuters poll forecasts Malaysian stockpiles in April will decline as production slumps versus a year ago. Malaysian end-stocks may drop 3.5% to a 14-month low of 1.82 million tonnes in April, in the absence of a sharp seasonal jump in output, the poll showed. Output is forecast to rise 8% to 1.32 million tonnes from March, but decline 22% year-on-year.
Official data is scheduled for release on Tuesday.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 1.3% higher at RM2,662 (US$664) per tonne at the close of trade.
Traded volumes were 39,693 lots of 25 tonnes each in the evening, lower than the 2015 daily average of 44,600.
"Buyers are there due to Ramadan, I think May will see some fairly good demand," said a trader based in Kuala Lumpur.
"While production will rise, end-stocks will be reduced from current levels. Dry weather is not a factor, demand is the bigger concern now."
The Muslim holy celebration of Ramadan, which starts in early June this year, is a month-long event of fasting and feasting that spurs higher palm oil demand for cooking.
Traders are relying on the festive season to drive higher palm oil demand.
Friday, May 6, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 6 MAY 2016
(May 6): Malaysian palm oil futures closed marginally lower on Friday, posting their first drop in three sessions as falls in competing vegetable oils weighed, but found some support from industry data showing lower production and short-covering by traders.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 0.04% lower at RM2,628 (US$656) per tonne.
It gained 1.3% this week after last week's 3.6% fall, its steepest weekly drop since early October.
Palm oil rose in the previous two sessions, posting its sharpest jump in nearly five months on Wednesday as traders covered short positions after four sessions of losses and as the ringgit sunk to a five-week low.
Traded volumes were 55,038 lots of 25 tonnes each, higher than the 2015 daily average of 44,600.
"There's some short covering towards the weekend, and production figures from the Southern Palm Oil Millers Association (SPPOMA) are 18% lower," said a trader from Kuala Lumpur, referring to data from a Malaysian millers association for the first five days of May.
Thursday, May 5, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 5 MAY 2016
(May 5): Malaysian palm oil futures reversed their losses from earlier trade on Thursday, rising to a one-week high as the ringgit weakened against the dollar to breach the 4.00 mark in the evening.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 0.5% higher at the close of trade, settling at RM2,629 (US$657) per tonne.
Palm on Wednesday had surged 3% to RM2,627, its strongest gain in nearly five months. The contract had declined in the previous four sessions before on falling export demand and expectations of rising production ahead of a government data release next Tuesday.
Traded volumes were 59,858 lots of 25 tonnes each on Thursday evening, against a 2015 daily average of 44,600.
"The ringgit had earlier touched 4.00," said a trader from Kuala Lumpur, adding that this supported palm oil which is traded in ringgit.
A weaker ringgit, which traded around 4.0020 in the evening, makes palm oil cheaper for holders of foreign currencies.
Falling inventories could further prop up benchmark palm oil prices. A Reuters poll of nine traders, analysts and planters forecast Malaysian stockpiles in April to decline 3.5% to 1.82 million tonnes from a month ago.
The forecasts come ahead of data release from the Malaysian Palm Oil Board (MPOB) next Tuesday.
Wednesday, May 4, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 4 MAY 2016
(May 4): Malaysian palm oil futures rose on Wednesday, marking their sharpest jump in nearly five months, as traders covered short positions after four sessions of losses and as the ringgit sunk to its weakest in five weeks.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 3% higher at RM2,616 (US$656) per tonne by the close of trade.
Palm lost 4.8% last month, weighed down by poor export demand, and hit a near two-month low in the previous session.
Traded volumes were 68,084 lots of 25 tonnes each at the end of the trading day, higher than the 2015 daily average of 44,600.
"The market was earlier oversold, and the weak ringgit triggered covering and technical buying as prices moved above RM2,600," said a trader from Kuala Lumpur.
A weaker ringgit, the currency palm oil is traded in, usually supports palm by making it cheaper for foreign currency holders.
The ringgit fell 1.5% against the dollar on Wednesday, settling at 3.9860 in the evening after earlier reaching 3.9900.
Tuesday, May 3, 2016
How to trade Crude Palm Oil Futures ( FCPO ) 3 MAY 2016
(May 3): Malaysian palm oil futures fell to a near two-month low on Tuesday, as poor demand for palm oil shipments weighed down the market.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 2.1% to 2,539 ringgit (US$647) per tonne at the close of trade, marking the fourth consecutive session of declines. It hit an intraday low of 2,537 ringgit per tonne, the lowest since March 9.
Traded volumes were 51,744 lots of 25 tonnes each, higher than a 2015 daily average of 44,600.
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed on Tuesday that palm oil shipments for the full month of April declined between 5% and 7% from March, as exports to major buyers Europe, China and India all fell.
"Exports are still not good, and production is still doing alright, we believe it (April production) is close to double digit growth," said a palm oil trader based in Kuala Lumpur.
"May exports could be better as (benchmark) prices drop or hover around current levels this month."
April production in Malaysia, the world's second-largest palm grower, is seen rising in line with the seasonal trend from the 1.2 million tonnes produced in March.
This would contribute to higher inventory levels, likely pushing down benchmark prices of the tropical oil.
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