Malaysian palm oil futures hit a two-week high on Thursday, reversing course in the second half on the back of a weaker ringgit and bargain hunting by traders after the previous session’s more than 1 percent fall. The benchmark November contract on the Bursa Malaysia Derivatives Exchange ended 2.3 percent higher at 2,034 ringgit ($480.28) a tonne, its highest since August 18. Earlier in the day, it fell as much as 0.6 pct to 1,977 ringgit.
Traded volume stood at 39,140 lots of 25 tonnes each, more than the usual daily average 35,000 lots. While a weaker ringgit propped up prices, palm also saw an uptrend as traders took advantage of softer prices, said a Kuala Lumpur-based trader. “In the absence of the Chinese market, we need to hang on to something and Malaysian palm oil lately has not been independent,” the trader said.
On the technical front, Reuters market analyst Wang Tao said palm oil will maintain its target of 1,963 ringgit as indicated by its wave pattern and a Fibonacci retracement analysis. In other vegetable oil markets, the US December soyoil contract was up 1.5 percent in Asian trade. Palm oil often takes price direction from crude oil due to the increasing use of vegetable oils in making renewable fuels.