Vegoils: Palm oil gains on weaker ringgit, tracking Dalian oils

By Emily Chow

KUALA LUMPUR (Reuters) - Malaysian palm oil futures rose in early trade on Wednesday, supported by a weaker ringgit and stronger related oils on China's Dalian Commodity Exchange (DCE).

A weaker ringgit, palm's currency of trade, typically makes the tropical oil cheaper for holders of foreign currencies. The ringgit fell to its weakest levels against the dollar since the start of the year on Wednesday morning, and was last down 0.1 percent at 4.0250 ringgit per dollar.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose 0.5 percent to 2,289 ringgit ($568.70) per tonne at the midday break, and was heading for its third gain in four sessions.

Trading volumes stood at 9,448 lots of 25 tonnes each at noon.

"The market is supported by the ringgit's weakness and the supportive DCE market," said a Kuala Lumpur based trader.

"However it is still waiting for fresh bull news to break above 2,300 ringgit."

Palm oil has been trading below 2,300 ringgit at two-year lows since last week, and has declined 5.8 percent since the start of June on the back of weakening demand.

Exports of palm oil from Malaysia, the world's second largest producer, for the June 1-25 period fell 12.6-14.1 percent on-month, according to data from independent inspection company AmSpec Agri Malaysia and cargo surveyor Societe Generale de Surveillance this week.

Palm oil may be rangebound between 2,150 ringgit and 2,398 ringgit per tonne in the third quarter, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

In other related oils, the Chicago July soybean oil contract was little changed, while the September soybean oil on China's Dalian Commodity Exchange rose 1.3 percent.

Meanwhile, the Dalian September palm oil contract was up 0.9 percent.

Palm oil prices track the performance of other edible oils, as they compete for a share in the global vegetable oils market.

(Reporting by Emily Chow; Editing by Richard Pullin)