Vegoils: Palm up after six days of falls, supported by weaker ringgit

By Emily Chow

KUALA LUMPUR (Reuters) - Malaysian palm oil futures rose in early trade on Wednesday, in line for its first day of gains in seven, correcting from a sharp drop in the previous session and supported by a weaker ringgit.

Weakness in the ringgit, palm's currency of trade, typically makes the tropical oil cheaper for holders of foreign currencies, lending support to demand.

The ringgit weakened around noon on Wednesday to its lowest level against the dollar since March 1, and was last down 0.1 percent at 3.9250. It has steadily declined in the past month, and has lost 1.6 percent of its value since the start of April.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 0.5 percent to 2,373 ringgit ($604.59) a tonne at the midday break.

Trading volumes stood at 12,860 lots of 25 tonnes each at the midday break.

"We're seeing some upside today, as we saw a sharp drop over the last three days," said a futures trader in Kuala Lumpur.

"There is also some rebound on a weak ringgit," he added.

Palm had fallen to a two-week low in its previous session, and was down 1.3 percent last week as traders turned bearish over weak export demand.

Malaysian palm oil product exports fell 5.7 percent for the full month of April versus March, inspection company AmSpec Agri Malaysia reported. Meanwhile, cargo surveyor Societe Generale de Surveillance showed a 4.5 percent decline for the same time period as Indian demand weakened.

In other related oils, the Chicago July soybean oil contract rose 0.7 percent, while the September soybean oil on China's Dalian Commodity Exchange was trading flat at around 0500 GMT.

The Dalian September palm oil contract declined 0.1 percent.

Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.

(Reporting by Emily Chow; Editing by Sunil Nair)