* USDA report showed higher forecast of supplies
* Palm oil to head towards 3,140 ringgit - technicals
* Malaysian weather office upgrades heavy rain warning
By Chew Yee Kiat
SINGAPORE, Jan 13 Malaysian crude palm oil
futures slipped on Friday as a much-anticipated U.S. crop report
showed a higher-than-expected forecast of oilseed supplies,
temporarily overshadowing prospects of lower production due to
The U.S. Department of Agriculture January crop report
painted a rosier picture for global supplies on Thursday, while
the Malaysian Palm Oil Board said this week that December stock
levels were higher than expected.
"With both the highly anticipated reports disappointing the
bulls, the market will henceforth look at fundamentals," said a
trader with a domestic commodities brokerage in Malaysia.
Benchmark March palm oil futures on the Bursa
Malaysia Derivatives Exchange fell 1.6 percent to close at 3,151
ringgit ($1,007) per tonne. Prices earlier touched an intraday
low of 3,143 ringgit, a level last seen on Dec. 29.
Traded volumes stood at 30,727 lots of 25 tonnes each,
higher than the usual 25,000 lots for the first time in the
Palm oil futures will clear a support at 3,176 ringgit per
tonne to head towards 3,140 ringgit thereafter, based on
technical analysis, Reuters market analyst Wang Tao said.
While the bearish USDA report sent the markets lower,
weather concerns should continue to provide support for oilseed
"Soybean losses were smaller than those for corn or wheat as
it found underlying support from continued worries about damage
to Argentina's soybean crop due to hot, dry weather," said Abah
Ofon, agricultural commodities analyst with Standard Chartered
Bank in Singapore.
Similarly for palm oil, traders are keeping a close watch on
wet weather in key exporter Malaysia as floods could disrupt
production, adding pressure to tightening stocks.
The Malaysian weather office upgraded its heavy rain warning
to orange from yellow for Pahang and Johor, key oil palm
producing states that account for 30 percent of national output.
The industry expects January production levels to be lower
but demand is expected to follow suit.
Cargo surveyors Intertek Testing Services and Societe
Generale de Surveillance reported a 14 and 19 percent drop in
Malaysia's palm oil exports for first 10 days in January.
The cargo surveyors will release exports data for Jan. 1-15
In related markets, Brent crude rose to close to $112 a
barrel on Friday, adding to the previous day's rally on the
prospect of Nigeria's oil unions halting the sector from Sunday,
part of a national strike against the end of fuel subsidies.
The bearish USDA report also weighed on some vegetable oil
The most active U.S. soyoil contract for March delivery
was slightly up after earlier losses while the most
active September 2012 soyoil contract on China's Dalian
commodity exchange lost 0.8 percent.
"Historically speaking, the price movement following the
January report may last a while, maybe 1-2 weeks. But the South
American weather still remains a concern for the soyoil market,"
said Huang Zhi Qiang from Guotai Junan Futures in Shanghai.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN2 3140 -67.00 3140 3140 4
MY PALM OIL FEB2 3151 -69.00 3148 3190 2185
MY PALM OIL MAR2 3151 -51.00 3143 3186 14279
CHINA PALM OLEIN SEP2 8040 -102.00 8032 8110 67744
CHINA SOYOIL SEP2 9004 -70.00 8988 9050 226790
CBOT SOY OIL MAR2 51.47 +0.01 51.19 51.75 7577
NYMEX CRUDE FEB2 99.84 +0.74 99.12 100.19 19606
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
(Editing by Clarence Fernandez)