VEGOILS-Palm oil slips; demand hopes curb losses
* Investors focus on impact of zero export tax, Jan export data eyed * Palm oil seen retracing to 2,452 ringgit -technicals * Prices should trade in a range of 2,450-2,550 ringgit -trader (Updates prices, adds detail) By Chew Yee Kiat SINGAPORE, Jan 3 (Reuters) - Malaysian palm oil futures edged lower on Thursday after prices climbed to a two-month high the previous day, although hopes of a new export tax structure boosting demand had curbed losses. The tropical oil started the year strongly by jumping to its highest since Nov. 2 on Wednesday after the United States reached a fiscal deal that prevented the world's largest economy from slipping into recession. Market players are eyeing Malaysia's Jan. 1-10 exports data due next week, expecting higher demand from crude palm oil as the country imposed a zero percent duty in January for shipments of the grade. "We see a bit of profit-taking coming in. Every time we go above 2,500 ringgit, there's no strong follow through," said a trader with a foreign commodities brokerage in Malaysia. "The important issue now is with the new export tax structure and traders want to see how Malaysian exports will be for the first 10 days. Prices should be trading in a range of 2,450-2,550 ringgit." At market close, the benchmark March contract on the Bursa Malaysia Derivatives Exchange fell 1.0 percent to 2,475 ringgit ($816) per tonne. Prices hit a two-month high of 2,524 ringgit on Wednesday. Total traded volumes stood at 36,244 lots of 25 tonnes each, higher than the usual 25,000 lots. Technicals appear to be bearish as palm oil is expected to retrace to 2,452 ringgit based on a wave analysis, Reuters market analyst Wang Tao said. But prices may find support as lower December production and disruption to supply due to heavy rains could help ease record-high stocks of 2.56 million tonnes, traders said. Industry regulator the Malaysian Palm Oil Board will release official data on December's stocks and output next week. Investors are monitoring the impact of China starting to enforce its quality standards on edible oil imports. Palm oil which fails to make the grade could see cargoes turned away from Chinese ports, depressing demand a little. Brent crude dropped below $112 a barrel on Thursday as the prospects of more budget battles in the United States and rising oil supply weighed on prices, although upbeat economic data from China limited losses. In competing vegetable oil market, U.S. soyoil for March delivery fell 0.2 percent in late Asian trade. China's Dalian Commodities Exchange is closed for the New Year holiday and will resume trading on Friday. Palm, soy and crude oil prices at 1007 GMT Contract Month Last Change Low High Volume MY PALM OIL JAN3 2364 -18.00 2350 2371 296 MY PALM OIL FEB3 2439 -18.00 2422 2460 6173 MY PALM OIL MAR3 2475 -26.00 2467 2513 20208 CHINA PALM OLEIN MAY3 6922 -46.00 6916 7044 653958 CHINA SOYOIL MAY3 8612 -30.00 8608 8740 449196 CBOT SOY OIL MAR3 50.96 -0.09 50.88 51.29 6154 NYMEX CRUDE FEB3 92.57 -0.55 92.49 92.98 11020 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=3.033 ringgit) (Editing by Niluksi Koswanage)
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