Malaysian palm oil futures closed higher on Tuesday, recovering from earlier declines as the ringgit's weakness helped prices.
Benchmark palm oil futures on the Bursa Malaysia Derivatives Exchange rose 1.1% to RM2,306 (US$576.50), the highest close since July 5, after falling as much as 1% earlier in the session.
Prices climbed to a one-week high of 2,299 last Friday, recovering from a 10-month low of RM2,186 on Tuesday.
"Further weakening in the ringgit attributed to today's short covering," a trader said.
The Malaysian ringgit, in which the benchmark is priced, fell 0.6% as falling crude prices underscored concerns about the country's oil and gas revenues.
Prices of palm oil have been under pressure as last week's data showed weak demand and an increase in production.
Palm oil output in Malaysia, the world's second-largest producer, rose about 12% in June, while inventories climbed for the first time in seven months, data from the Malaysian Palm Oil Board (MPOB) showed last week.
But in a sign of waning demand, exports dropped more than expected, hurting prices.
Traders will be closely monitoring Malaysian export data for July 1–20 from Intertek Testing Services on Wednesday.
Indonesian exports in June fell 6% while output rose for a second month, a Reuters survey showed.
While dryness across Southeast Asia related to El Nino is expected to curb global palm output this year, the possible emergence of La Nina bringing rains to the region could help improve fruit yields.
On a technical basis, prices may drop into a range of RM2,224–2,237 per tonne, as they could have completed a bounce from the July 12 low of RM2,186.
The most actively traded September contract for palm olein on the Dalian Commodity Exchange fell 0.8% while Dalian soybean oil, a substitute for palm oil, lost 1.1%.
No comments:
Post a Comment