VEGOILS-Palm snaps two-day decline as weaker ringgit underpins
24/05/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures ended higher on Wednesday, snapping a two-day decline as a weaker ringgit and stronger crude futures provided support.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange gained 28 ringgit, or 0.83%, to 3,406 ringgit ($767.98) a tonne.
The contract rose on strength from soybean oil and Dalian edible oils, coupled with weakness in the ringgit, a Kuala Lumpur-based trader said.
The ringgit MYR=, palm's currency of trade, fell 0.48% against the dollar to its lowest since November 2022, making the commodity cheaper for holders of foreign currency.
Oil prices rose after data showed U.S. inventories and fuel supplies tightening and following a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts. O/R
Dalian's most-active soyoil contract DBYcv1fell 1.2%, while its palm oil contract DCPcv1also fell 1.2%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.06%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Sime Darby Plantation said prices are expected to hover around current levels in the near term with price competitiveness being dependent on the supply outlook of competing oils and Indonesia's palm oil export policies.
"Macroeconomic and geopolitical challenges, including concerns of slowing economic growth and high interest rates could limit the upside potential of commodity prices," it said in a bourse filing.