* Prices touch high at 2,488 ringgit, level last seen on Jan
* Palm oil to test resistance at 2,486 ringgit -technicals
* Palm prices to trade in 2,350-2,550 ringgit range -analyst
* Global importers to buy more cheap palm oil in 2013 -Oil
(Updates prices, releads)
By Anuradha Raghu
SINGAPORE, Jan 23 Malaysian palm oil rose to a
near three-week high on Wednesday, after edging lower in the
morning session, as prices drew support from concerns over bad
weather hurting the global supply of edible oils.
Drought in Argentina and southern Brazil, the world's major
soy producers, as well as dryness in the grain-producing parts
of the United States, have sparked shortage worries and raised
prices of these commodities, in turn supporting palm oil.
"Prices succumbed to some early profit-taking after hitting
a fresh 2-week high yesterday," said a trader with a Malaysian
commodities brokerage in Kuala Lumpur, referring to prices
trading lower in the morning session.
"A forecast for tight U.S. and global supplies of grains
should support the market," he said. "An upward rally will hinge
on whether speculators step back in."
By the close, the benchmark April contract on the
Bursa Malaysia Derivatives Exchange was up 0.6 percent at 2,479
ringgit ($815) per tonne, slightly lower than its intraday high
at 2,488 ringgit per tonne, a level unseen since Jan. 4.
Total traded volumes stood at 50,452 lots of 25 tonnes each,
more than double the usual 25,000 lots, as some traders squared
their positions ahead of a public holiday on Thursday.
Technical analysis shows palm oil is likely to test a
resistance at 2,486 ringgit per tonne, as it has cleared another
at 2,449 ringgit, said Reuters market analyst Wang Tao.
Seasonal slowing production in Malaysia, the world's No.2
producer, could help ease a record stockpile of 2.63 million
tonnes, but weak demand from top buyers China and India could
cause a repeat of the double-digit export slide during the first
twenty days of January.
Malaysia will retain its crude palm oil tax at zero percent
in February in a move to stoke demand, but cargo surveyor data
showed disappointing palm oil imports in China, which analysts
linked to the republic "getting serious" about import rules, as
well as low northern temperatures that will solidify the oil.
"Malaysia and Indonesia, the exporters, have done what they
can, but are running out of tools to boost demand further. It
really depends on the consumption rate in China and India to
help demand," said Phillip Futures analyst Ker Chung Yang in
"We are still waiting for the major importers to react to
the zero percent tax rates and the benefits that have been
On Tuesday, Hamburg-based oilseed analysts Oil World
forecast that global edible oil importers were likely to boost
purchases of low-priced palm oil in coming months, turning away
from soyoil and other more expensive seed-based oils.
Brent crude held above $112 a barrel on Wednesday, supported
by a brighter outlook for the global economy, while investors
awaited inventory data from the United States for clues to
demand in the world's largest oil consumer.
In competing vegetable oil markets, U.S. soyoil for March
delivery edged up 0.2 percent in late Asian trade. The
most active May soybean oil contract on the Dalian
Commodity Exchange closed 0.3 percent higher.
Palm, soy and crude oil prices at 1014 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB3 2410 -2.00 2390 2418 439
MY PALM OIL MAR3 2449 +5.00 2426 2459 6348
MY PALM OIL APR3 2479 +14.00 2450 2488 20631
CHINA PALM OLEIN MAY3 6826 +38.00 6798 6850 182746
CHINA SOYOIL SEP3 8848 -2.00 8814 8876 331530
CBOT SOY OIL MAR3 52.54 +0.11 52.21 52.61 4861
NYMEX CRUDE MAR3 96.73 +0.05 96.44 96.90 12774
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
(Additional reporting by Chew Yee Kiat; Editing by Clarence