Vegoils Palm rises to over 2-wk high, posts biggest weekly gain since Feb

by **Cals** Sat 30 May 2015, 00:56

Vegoils
Palm rises to over 2-wk high, posts biggest weekly gain since Feb

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By Reuters / Reuters | May 29, 2015 : 6:32 PM MYT

KUALA LUMPUR (May 29): Malaysian palm oil futures edged up to their highest in over two weeks on Friday to record their biggest weekly gain in four months, buoyed by a weak ringgit and firm overseas soy markets.

Benchmark prices hit three-week lows on Monday before reversing course to follow a surge in Chinese and U.S. soy markets, with robust export demand and a weakening Malaysian currency fuelling the rally. Prices have risen 3.8 percent this week, the strongest weekly rise since early February.

The August contract on the [size=14]Bursa Malaysia Derivatives exchange rallied to 2,223 ringgit, its highest since May 13, before settling at 2,217 ringgit a tonne by Friday's close, 0.4 percent higher.

"The market is holding firm because we have a weak ringgit which is encouraging exports, and good movement from U.S. and Dalian soybean oil," said a trader with a foreign commodities brokerage in Kuala Lumpur.

"That's why the market can go up to retest the 2,220 ringgit resistance level. If there's no follow through, there may be some profit-taking... but given the momentum and velocity of the movement, chances are higher of the market going up."

Prices in May rose 5.5 percent, posting their first monthly gain in three months.

Total traded volume stood at 30,811 lots of 25 tonnes each, well below the average 35,000 lots.

The Malaysian ringgit notched a fifth straight day of losses on Friday, and was down 0.6 percent to 3.6640 per dollar by 1016 GMT.

Technicals were bullish. Palm oil is poised to break resistance at 2,222 ringgit per tonne and rise further to the next resistance at 2,246 ringgit, according to Reuters market analyst Wang Tao.

Indonesia, the world's largest producer of palm oil, will keep its export tax for the crude grade unchanged at zero percent for June, its trade ministry said on Friday. Malaysia, the No.2 producer, will also continue its duty-free policy for the next month.

The U.S. July soyoil contract had edged down 0.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange fell 0.4 percent.

In other markets, crude oil prices rose around 1 percent on Friday after U.S. inventories fell for a fourth straight week, although prices were set for a weekly drop on a stronger dollar.
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