JAKARTA: Malaysian palm oil futures recovered on Monday, after trading sideways early in the session, but a stronger ringgit limited gains.
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The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 6 ringgit, or 0.16 per cent, at RM3,687 (US$843.71) a metric tonne by midday.
The contract lost 1.79 per cent last week, its fourth consecutive weekly drop.
“Palm oil futures is supported by bargain hunting after found support above RM3,663 a tonne but firm ringgit may limit upside,” a Kuala Lumpur-based trader said.
The contract was traded in bound range of RM3,663-3,705 per tonne earlier in the session.
Malaysian ringgit, the contract currency of trade, strengthened 1.31 per cent against the U.S. dollar on Monday, hitting its highest since mid-February 2023.
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A stronger ringgit made the contract less attractive for foreign currency holders.
Dalian’s most-active soyoil contract lost 0.46 per cent, while its palm oil contract gained 0.27 per cent. Soyoil prices on the Chicago Board of Trade was down 0.18 per cent.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Indonesia has revised its rules on its palm oil domestic market obligation (DMO) scheme, raising the price cap in a bid to improve supplies of cheap cooking oil, while lowering domestic distribution target to 250,000 tons monthly.
Palm oil may revisit its Aug. 14 low of RM3,638 per metric tonne, driven by a wave (5), said Reuters technical analyst Wang Tao.
-NewStraitsTime