Malaysian palm oil futures closed at its highest level in two weeks on Tuesday, tracking firmer Chicago soyoil, while a weaker ringgit also added support.

The benchmark palm oil contract FCPO1! for February delivery on the Bursa Malaysia Derivatives Exchange gained 63 ringgit, or 1.54%, to 4,157 ringgit ($1,006.54) a metric ton at closing.

“CPO opened higher in the morning session on news of China’s purchases of U.S. soybeans, and sentiment was also lifted by higher crude oil prices,” said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

Chicago soybean futures edged higher as traders assessed the pace of U.S. soybean purchases by top buyer China following a trade truce between Beijing and Washington in late October.

Dalian’s most-active soyoil contract (DBYcv1) was up 0.17%, while its palm oil contract CPO1! rose 1.04%. Soyoil prices on the Chicago Board of Trade (BOc2) added 0.57%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Malaysian ringgit, palm’s currency of trade, eased 0.07% against the U.S. dollar on the day, making the contract cheaper for foreign currency holders.

Indonesia’s largest palm oil association GAPKI said on Monday it saw no major impact yet on production after the island of Sumatra was devastated by floods.

Palm oil FCPO1! may retrace into the 4,013-4,041 ringgit per metric ton range, as it failed to break resistance at 4,121 ringgit, per Reuters technical analyst Wang Tao.
Source: Reuters