* Palm oil stocks probably eased 2.9 pct to 2.55 mln T in
* Palm oil to drop to 2,510 ringgit -technicals
* Prices rangebound between 2,530 and 2,567 ringgit
By Chew Yee Kiat
SINGAPORE, Feb 7 Malaysian palm oil futures
edged up on Thursday, as investors expect a marginal drop in
January stocks, although cautious sentiment ahead of the
upcoming long holiday capped gains.
Lower production is likely to have helped Malaysian palm oil
stocks ease in January from a record high in the previous month,
a Reuters survey of five plantation companies showed on
Inventory levels most likely dropped 2.9 percent to 2.55
million tonnes in January from December's all-time high, the
first decline since last June, according to the survey.
Stronger export demand seen in the last week of January may
have helped cut stocks and the trend could persist, given palm
oil's attractive discount to soybean oil and as worries eased
over China's stricter quality regulation.
"Stocks are expected to drop, due to exports picking up
towards end-January," said a dealer with a foreign commodities
brokerage in Malaysia.
At the close, the benchmark April contract on the
Bursa Malaysia Derivatives Exchange had gained 0.2 percent to
2,552 ringgit ($826) per tonne. Prices were rangebound between
2,530 and 2,567 ringgit.
Total traded volumes stood at 30,443 lots of 25 tonnes each,
higher than the average 25,000 tonnes.
Technical analysis shows palm oil is expected to fall to
2,510 ringgit per tonne, as indicated by its wave pattern and a
Fibonacci retracement analysis, said Reuters market analyst Wang
The Malaysian financial markets will be closed next Monday
and Tuesday for the Lunar New Year holiday. Industry regulator
the Malaysian Palm Oil Board will release January inventory and
output data after the market resumes trading on Wednesday.
Cargo surveyors Intertek Testing Services and Societe
Generale de Surveillance will issue export data for Feb. 1-10
also on Wednesday.
The market will be looking for trading direction from
Friday's U.S. Department of Agriculture monthly supply and
demand reports, which may be bullish for palm oil due to
tighter soybean stocks.
In other markets, oil rose above $117 a barrel on Thursday
as traders awaited word from the European Central Bank that
could confirm speculation the region's troubled economy was
turning a corner.
In competing vegetable oil markets, U.S. soyoil for March
delivery eased 0.5 percent in late Asian trade. The most
active September soybean oil contract on the Dalian
Commodity Exchange hit a one-week low.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB3 2470 +1.00 2470 2490 85
MY PALM OIL MAR3 2529 +5.00 2508 2540 2875
MY PALM OIL APR3 2552 +5.00 2530 2567 16892
CHINA PALM OLEIN SEP3 7116 -38.00 7078 7146 334800
CHINA SOYOIL SEP3 8764 -60.00 8718 8806 307848
CBOT SOY OIL MAR3 52.20 -0.25 52.13 52.56 5883
NYMEX CRUDE MAR3 96.84 +0.22 96.44 96.94 12362
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)