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Palm oil in line for weekly gain on stronger U.S. soyoil

KUALA LUMPUR (Reuters) - Malaysian palm oil futures rose during the first half of trade on Friday, in line for a third day of gains in four, tracking strength in U.S. soyoil on the Chicago Board of Trade.

Land that has been cleared is pictured at an oil palm plantation in Johor, Malaysia February 26, 2019. REUTERS/Edgar Su/Files

Palm is also in line for a weekly gain, up 1.6 percent so far, supported by declines in the ringgit earlier this week.

A weaker ringgit, palm’s currency of trade, usually makes the edible oil cheaper for foreign buyers. The ringgit declined 0.4 percent so far this week against the dollar after a global index provider said it could drop Malaysia from the FTSE World Government Bond Index due to market accessibility and liquidity concerns.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.6 percent to 2,196 ringgit ($531.72) a tonne at the midday break.

“Palm is up tracking U.S. soyoil,” said a Kuala Lumpur-based futures trader. “Moving forward, the market is looking at the export pace also, which are likely to be good.”

Malaysia palm oil shipments had gained between 1.5-6.7 percent for the 1-15 April period versus the corresponding duration in March, according to cargo surveyor data.

Data for April 1-20 is scheduled for release on Saturday and Monday by cargo surveyors.

In other related oils, the Chicago May soybean oil contract had jumped 1.2 percent on Thursday as traders positioned ahead of a three-day weekend, as U.S. grain markets are closed for Good Friday.

Meanwhile, the May soyoil contract on the Dalian Commodity Exchange dipped 0.4 percent, and the Dalian May palm oil contract gained 0.3 percent.

Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.

Reporting by Emily Chow; Editing by Rashmi Aich