January 29, 2018 / 5:44 AM / 7 months ago

VEGOILS-Palm gains over 1 pct on recovering demand outlook

    * Palm sees sharpest rise in nearly one month
    * Stable ringgit, stronger related oils support - traders
    * Palm may test support at 2,462 rgt/T - technicals

    By Emily Chow
    KUALA LUMPUR, Jan 29 (Reuters) - Malaysian palm oil futures
rose more than 1 percent at midday on Monday, its sharpest gain
since the start of the year, on expectations demand will recover
and as the ringgit, the tropical oil's currency of trade,
fell in early trade. 
    A stronger ringgit usually makes palm oil more expensive for
holders of foreign currencies and reduces demand. Palm oil
prices were weighed down last week after the central bank raised
interest rates, lending support to the ringgit.

    The ringgit has appreciated 4 percent since the start of the
year, and has gained over a fifth of its value since 2017, in
line with improving crude oil prices. 
    The currency fell 0.1 percent earlier in the day and was
last up 0.05 percent against the dollar at 3.8670.
    The benchmark palm oil contract for April delivery
on the Bursa Malaysia Derivatives Exchange was up 1.3 percent at
2,517 ringgit ($650.89) a tonne at the midday break, its
sharpest gain since Jan. 3.
    Trading volumes stood at 11,690 lots of 25 tonnes each at
    Expectations of stronger exports is supporting the market,
said a trader from Kuala Lumpur. 
    "We're expecting to see smaller negative growth," he said,
referring to cargo surveyors' export data scheduled for release
on Wednesday.  
    Palm oil shipments from Malaysia during Jan. 1-25 fell about
7 percent versus the corresponding period last month. The drop
is weaker compared with the Jan. 1-20 period, which saw declines
of 13-16 percent.
    Gains in competing vegetable oils such as soyoil also
supported palm, another trader said. Palm oil prices track
movements in other related edible oils, as they compete for a
share in the global vegetable oils market. 
    The March soybean oil contract on the Chicago Board
of Trade rose 0.4 percent, while the May soybean oil on the
Dalian Commodity Exchange was up 0.5 percent.
    In other related edible oils, the Dalian May palm oil
contract also edged up 0.5 percent. 
    Palm oil may test a support at 2,462 ringgit, as it has
broken a higher support at 2,491 ringgit per tonne, said Wang
Tao, a Reuters market analyst for commodities and energy
    Palm, soy and crude oil prices as of 0519 GMT
 Contract          Month    Last   Change     Low   High  Volume
 MY PALM OIL       FEB8     2512   +30.00    2500   2513     113
 MY PALM OIL       MAR8     2518   +35.00    2490   2518     394
 MY PALM OIL       APR8     2517   +33.00    2488   2519    5996
 CHINA PALM OLEIN  MAY8     5252   +24.00    5208   5264  209396
 CHINA SOYOIL      MAY8     5820   +26.00    5782   5832  220898
 CBOT SOY OIL      MAR8    32.91    +0.12   32.84  32.93    3477
 INDIA PALM OIL    JAN8   563.00    +0.60  562.00  564.8     111
 INDIA SOYOIL      FEB8   750.95    +3.95   750.7  754.4    8360
 NYMEX CRUDE       MAR8    66.36    +0.22   66.10  66.46   40667
  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
($1 = 3.8670 ringgit)
($1 = 63.5175 Indian rupees)
($1 = 6.3230 Chinese yuan)

 (Reporting by Emily Chow; Editing by Biju Dwarakanath)
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