VEGOILS-Palm rises to 3-week high as output worries ease

Tue Oct 8, 2013 6:11am EDT

* Prices climb to 2,353 rgt in late trade, highest since
Sept. 17
    * Palm oil may keep on rising to 2,401 ringgit - technicals
    * "Huge crops" might not materialize yet - trader
    * Malaysian end-stocks seen at 1.91 mln T - Reuters survey

    By Anuradha Raghu
    KUALA LUMPUR, Oct 8 (Reuters) - Malaysian palm oil futures
rose to their highest in nearly three weeks on Tuesday, posting
three straight days of gains, after a market survey showed palm
stocks and output in the world's No.2 producer may be lower than
investors had initially feared.
    A Reuters survey on Monday showed that Malaysian palm oil
inventories may have climbed to a six-month high of 1.91 million
tonnes at the end of September, lifted by a 15 percent surge in
production.  
    Market players are wary that seasonally stronger output and
quicker harvesting in September would trump export demand and
lead to stockpiles that could quickly grow to record highs
again.
    "The market had been talking about huge crops, but maybe it
might not materialize in September," said a trader with a
foreign commodities brokerage.
    By Tuesday's close, the benchmark December contract 
on the Bursa Malaysia Derivatives Exchange had inched up 1.4
percent to 2,351 ringgit ($735) per tonne. Prices had climbed to
2,353 ringgit, the highest since Sept. 17. 
    Trade was also more lively as Chinese markets, including the
Dalian Commodities Exchange, resumed trading after a week-long
national holiday, traders said.
    Total traded volume stood at 31,954 lots of 25 tonnes each,
compared with the average 35,000 lots.
    Technicals showed Malaysian palm oil had climbed above the
Oct. 2 high of 2,334 ringgit, and may keep on rising towards
2,401 ringgit, Reuters market analyst Wang Tao
said.  
    In competing markets, the U.S. soybean market registered
modest gains in the past few sessions, finding support after
private analytics firm Informa Economics lowered its estimate
for U.S. production of the oilseed. 
    Tighter supply of soybeans for crushing into soyoil could
shift demand to palm oil, a rival vegetable oil.
    The U.S. soyoil contract for December rose 0.7
percent in late Asian trade. The most-active January soybean oil
contract on the Dalian Commodities Exchange rose 0.4
percent.  
    In other markets, Brent crude oil held above $109 a barrel
on Tuesday as the oil supply outlook improved and the U.S.
budget crisis continued to cloud the outlook for demand in the
world's biggest oil consumer. 
  Palm, soy and crude oil prices at 1006 GMT
                                                                                          
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      OCT3    2350    +0.00    2346    2364     238
  MY PALM OIL      NOV3    2353   +31.00    2334    2353    3969
  MY PALM OIL      DEC3    2351   +33.00    2332    2353   15639
  CHINA PALM OLEIN JAN4    5500  +108.00    5380    5556  444452
  CHINA SOYOIL     JAN4    7000   +30.00    6918    7044  518356
  CBOT SOY OIL     DEC3   40.17    +0.27   39.91   40.48   10707
  NYMEX CRUDE      NOV3  103.82    +0.79  102.85  103.84   13581
                                                                                          
  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=3.199 Malaysian ringgit)

 (Editing by Clarence Fernandez)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.