VEGOILS-Palm oil jumps, posts first weekly gain in five

* Palm oil up 5.9 pct for the week, best this year
* Prices touch 2,410 ringgit, last seen on Nov. 28
* Palm oil's bullish target at 2,419 ringgit -technicals

(Updates prices)
By Chew Yee Kiat
SINGAPORE, Dec 21 (Reuters) - Malaysian palm oil futures
touched a more-than-three-week high on Friday, posting their
first weekly gain in five weeks as traders sought to cover short
positions amid optimism for a zero export tax on crude palm oil
in early 2013 to cut stocks.
Palm oil posted a 5.9 percent gain on the week, its best
performance this year, after the edible oil suffered four
straight weeks of losses on record high stocks.
"There's a technical break above the resistance level at
2,381 ringgit per tonne, and prices should remain supported
above the 2,370 ringgit level," said a dealer with a foreign
commodities brokerage in Malaysia. "One factor could be the
pre-weekend short cover."
At the close, the benchmark March contract on the
Bursa Malaysia Derivatives Exchange was up 3.8 percent to settle
at 2,409 ringgit ($788) per tonne, just off a high at 2,410
ringgit, a level last seen on Nov. 28.
Total traded volumes stood at 33,240 lots of 25 tonnes each,
higher than the usual 25,000 lots.
Technical analysis showed palm oil is expected to test
resistance at 2,381 ringgit per tonne and a bullish target at
2,419 ringgit has been established, Reuters market analyst Wang
Tao said.
A small surprise increase in Malaysia's palm exports for the
first 20 days of the month also injected cheer in the market,
with cargo surveyor Societe Generale de Surveillance reporting a
slight increase of 0.5 percent in shipments for the period from
a month ago.
A jump in crude palm oil exports during the period, which
shows companies are pushing out exports ahead of the year-end
expiry of their duty-free quota, could help ease record-high
stocks in the No.2 palm producer.
Analysts, however, cautioned against an overly optimistic
view on inventory levels, citing lower demand from the northern
hemisphere, where the edible oil tends to solidify in winter.
"Hence, despite the expected December month-on-month
production decline of 12 percent, inventory should stay
persistently high at above 2.5 million tonnes," Alan Lim Seong
Chun, an analyst with Malaysia's Kenanga Investment Bank, said
in a research note.
"Looking ahead to first quarter 2013, we expect the
inventory to decline only marginally and to stay above 2 million
tonnes and limit the price upside to below 3,000 ringgit."
Brent crude fell below $110 a barrel on Friday after talks
in the United States to avert a budget crisis stalled, reviving
worries about demand in the world's biggest oil consumer.
Palm oil prices were also supported by gains in competing
vegetable oil markets. U.S. soyoil for January delivery
gained 1.8 percent in late Asian trade. The most active May 2013
soybean oil contract on the Dalian Commodity Exchange
closed 0.6 percent higher.
Palm, soy and crude oil prices at 1008 GMT

Contract Month Last Change Low High Volume
MY PALM OIL JAN3 2284 +83.00 2199 2284 536
MY PALM OIL FEB3 2353 +88.00 2271 2354 5274
MY PALM OIL MAR3 2409 +88.00 2326 2410 16266
CHINA PALM OLEIN MAY3 6858 +144.00 6706 6874 868566
CHINA SOYOIL MAY3 8630 +50.00 8550 8658 666688
CBOT SOY OIL MAR3 49.21 +0.90 48.41 49.28 10191
NYMEX CRUDE FEB3 89.11 -1.02 88.93 90.07 20518

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.06 ringgit)

(Editing by Robert Birsel)