14.05.2018 (The Edge Markets MY) - KUALA LUMPUR (May 14): Malaysian palm oil futures rose 3% on Monday, their biggest intraday gain in more than four months, buoyed by early losses in the ringgit and lower than forecast end-stocks data from an industry regulator.

A weaker ringgit, palm's currency of trade, typically lends support to palm oil prices, because it makes the tropical oil cheaper for holders of foreign currencies.

The ringgit weakened nearly 1% against the dollar to a four-month low in early trade on Monday but recovered to close flat at 3.9480 on Monday evening.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 1.5% to RM2,416 (US$611.96) a tonne at the end of the trading day. Earlier in the session, it jumped 3% to RM2,452, its highest since April 10.  

Trading volume stood at 67,630 lots of 25 tonnes each at the close.

"Crude palm oil gains on the weaker ringgit and lower stock levels," said a Kuala Lumpur-based futures trader. "Gains should be sustainable as long as the ringgit doesn't strengthen again too quickly."

Another trader, however, said palm's gains might not be sustained. "The ringgit will strengthen in a week and then palm oil will fall again," he said, adding that palm's gains had eased in the later trading session as the ringgit recovered losses.

Palm oil prices have been on a downward trend since early last month on the back of weaker demand. They fell to a more than two-year low this month before climbing to a one-month peak in early trade on Monday.

However, lower than forecast end-April stockpiles in Malaysia lent support to palm prices, the traders said.

Data from the Malaysian Palm Oil Board (MPOB) showed April end-stocks in Malaysia, the world's second-largest palm oil producer, dropped 6.4% from the previous month to 2.17 million tonnes, their lowest level since September.

Palm oil could rise towards RM2,466 a tonne, having cleared resistance at RM2,439, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

In related oils, the Chicago July soybean oil contract was down as much as 0.2% while September soybean oil on China's Dalian Commodity Exchange fell by up to 1%.

The Dalian September palm oil contract slipped by up to 0.4%.

Palm oil is affected by movements in rival edible oils that compete for a share of the global vegetable oils market.

Palm, soy and crude oil prices, as of 1057 GMT

Contract                        Month      Last     Change      Low      High       Volume

MY PALM OIL               MAY8         0       +11.00          0           0               7

MY PALM OIL               JUN8      2415    +34.00        2404     2451          3977

MY PALM OIL               JUL8       2416    +35.00       2406      2452        25852

CHINA PALM OLEIN    SEP8      5070     -22.00        5060     5120       330134

CHINA SOYOIL            SEP8      5780     -56.00        5774      5834      354660

CBOT SOY OIL             JUL8      31.24    -0.03        31.15     31.35          4916

INDIA PALM OIL           MAY8    657.00     -4.10      655.00     663.1           966

INDIA SOYOIL              MAY8         754     -7.70          754      759.7       13110

NYMEX CRUDE            JUN8     70.66      -0.04       70.26       70.74     107453

Palm oil prices in Malaysian ringgit per tonne

CBOT soy oil in US cents per pound

Dalian soy oil and RBD palm olein in Chinese yuan per tonne

India soy oil in Indian rupee per 10 kg

Crude in US dollars per barrel

(US$1 = 3.9480 ringgit)

(US$1 = 67.5800 Indian rupees)

(US$1 = 6.3370 Chinese yuan)