Palm oil climbed for a second day as the Malaysian currency dropped against the U.S. dollar, boosting demand for ringgit-denominated futures.
The contract for March delivery, which had the biggest open interest, advanced as much as 0.5 percent to 2,537 ringgit ($770) a ton on the Bursa Malaysia Derivatives and ended the morning session at 2,533 ringgit. Futures are 0.6 percent higher this week, set for the fourth weekly gain in five. The market will be shut for a local holiday tomorrow.
The ringgit dropped as an improving U.S. economy bolstered speculation the Federal Reserve will continue to reduce monetary stimulus. The currency touched 3.2997 per dollar today, the lowest level since Jan. 3, and was poised for its worst week in four, according to data compiled by Bloomberg.
“The ringgit will get weaker as the dollar is rebounding,” said Hiro Chai, vice president at CIMB Futures Sdn. in Kuala Lumpur. “That will probably give a bit of support to palm oil.”
Soybean oil for March delivery declined 0.4 percent to 37.83 cents a pound on the Chicago Board of Trade. Soybeans were little changed at $13.19 a bushel.
Refined palm oil for May delivery rose 1.1 percent to 5,842 yuan ($966) a ton on the Dalian Commodity Exchange. Soybean oil climbed 0.2 percent to 6,626 yuan.
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