(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.
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