The Edge Markets (19/03/2018) - KUALA LUMPUR (March 19): Malaysian palm oil futures edged up on Monday supported by weakness in the ringgit, its currency of trade, and with traders bullish about the prospects of improving demand.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 0.4% to 2,425 ringgit (US$619.25) a tonne at the close, after falling to a one-week low of 2,407 ringgit earlier in the session. 

Trading volumes stood at 52,775 lots of 25 tonnes each on Monday evening.

"The market is supported in anticipation of better exports... But lower soyoil seems to be checking palm's upside," said a Kuala Lumpur-based trader, referring to soyoil on the U.S. Chicago Board of Trade. 

Another trader in Kuala Lumpur added that a slightly weaker ringgit also added to palm's gains, as this makes the edible oil cheaper for holders of foreign currencies.

The ringgit slipped 0.2% to 3.9160 against the dollar on Monday evening.

Palm oil exports from Malaysia, the world's second largest producer, weakened 2%-5% in the first half of March versus the corresponding period in February, according to shipment data.

Demand is expected to pick up from regions such as the Middle East, as buyers stock up ahead of Ramadan which begins in mid-May this year. 

The Muslim holy month sees devotees break day-long fasts with communal feasting, which incurs higher usage of palm oil for cooking purposes. Buyers usually start increasing purchases of palm oil, one to two months ahead of the festivities.

In other related oils, the Chicago Board of Trade's May soybean oil contract rose 0.2%, while May soybean oil on China's Dalian Commodity Exchange fell 0.2%. 

The Dalian May palm oil contract was also down 0.3%.

Palm oil prices are affected by movements in rival edible oils, as they compete in the global vegetable oils market.    

 Palm, soy and crude oil prices as of 1056 GMT

 Contract                      Month     Last    Change    Low    High  Volume
 MY PALM OIL              APR8      2433     -5.00      2426    2442     915
 MY PALM OIL              MAY8     2436    +7.00      2420    2439   10889
 MY PALM OIL              JUN8       2427    +9.00     2407    2428   21084
 CHINA PALM OLEIN   MAY8     5108    -14.00    5056    5116   215062
 CHINA SOYOIL            MAY8     5686    -12.00    5646    5702   308694
 CBOT SOY OIL            MAY8     32.05   +0.07     31.87    32.1    17015
 INDIA PALM OIL         MAR8    640.40   -2.10    638.30   640.4     488
 INDIA SOYOIL             MAR8     767.2     -2.80    765.4    767.9    1800
 NYMEX CRUDE           APR8     62.13     -0.21     61.94    62.28   10979

 Palm oil prices in Malaysian ringgit per tonne
 CBOT soy oil in U.S. 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 U.S. dollars per barrel
 
(US$1 = 3.9160 ringgit)
(US$1 = 65.0800 Indian rupees)
(US$1 = 6.3301 Chinese yuan)

Read more at http://www.theedgemarkets.com/article/palm-supported-weaker-ringgit-rising-demand-outlook-0