(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.
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