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VEGOILS-Palm oil slips from 1-week high, stocks in focus
September 4, 2012 / 5:36 AM / 5 years ago

VEGOILS-Palm oil slips from 1-week high, stocks in focus

* Palm oil futures slips from 1-week high as traders book
    * U.S. soybeans hits record high; palm oil rise muted on
stock build up
    * Malaysia's August exports up 19.6 pct -SGS

 (Releads, adds details, updates prices)
    By Anuradha Raghu
    KUALA LUMPUR, Sept 4 (Reuters) - Malaysia palm oil futures
closed lower on Tuesday after rising to their highest level in a
week, as traders booked profits from a rally triggered by record
high soybean prices.
    Prices also fell after traders priced in a rise in stocks in
Malaysia due to higher production, although strong palm oil
exports could help reduce inventories.
    "I think palm oil is rising on the back of soybeans and
that's the main reason of the strength in palm oil," said a
trader with a foreign commodities brokerage in Malaysia.  
    "The unexpectedly high palm oil exports in August also
provided some friendly sentiment. Previously we were expecting
stocks at 2.3 million tonnes, now everybody has cut back stocks
by 200,000-250,000 tonnes based on exports alone."       
    The benchmark November 2012 contract on the Bursa
Malaysia Derivatives Exchange lost 0.5 percent to close at 3,058
ringgit ($985) per tonne after touching 3,100 ringgit, a level
last seen on Aug. 27.
    Total traded volume stood at 42,611 lots, much higher than
the usual 25,000 lots.
    U.S. soybean futures climbed to a record high on Tuesday as
falling exports from Brazil highlighted the decline in global
supplies after poor production in South America and a historic
drought in the United States. 
    Higher soybean and soybean oil prices mean consumers are
likely to turn to substitutes such as palm oil. 
    Technicals remain bearish as palm oil faces a resistance at
3,093 ringgit per tonne, and will retrace to 3,049 ringgit, said
Reuters analyst Wang Tao. 
    But demand is likely to remain firm: Malaysia's palm oil
exports surged 17.7 percent in August from a month ago,
according to cargo surveyor Intertek Testing Services.
    Another cargo surveyor Societe Generale de Surveillance
reported a steeper 19.6 percent increase for the same period,
thanks to higher shipments of crude products and a demand
recovery from major food buyers China and India. 
    The El Nino weather conditions will likely be weak and
short-lived, New Zealand scientists said on Tuesday, providing
some relief to plantation owners in Southeast Asia.
    Oil prices rose for a fourth day to around $116 per barrel,
supported by hopes for further stimulus measures from central
banks in the United States and Europe, and a slow restart in the
Gulf of Mexico after Hurricane Isaac. 
    The tight global supply of soybeans also pushed other
vegetable oil markets higher. 
    By 1004 GMT, the most active U.S. soyoil contract for
December delivery was 1.6 percent higher after touching 
the highest level since September 2011. 
    The most active January 2013 soyoil contract on the
Dalian Commodity Exchange closed 1 percent higher after touching
a fresh contract high.    
  Palm, soy and crude oil prices at 1004 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      SEP2    2940   -21.00    2936    2990     385
  MY PALM OIL      OCT2    3010   -17.00    2984    3055    3423
  MY PALM OIL      NOV2    3058   -15.00    3032    3100   22806
  CHINA PALM OLEIN JAN3    8244   +44.00    8216    8352  319666
  CHINA SOYOIL     JAN3   10264   +92.00   10212   10308  557472
  CBOT SOY OIL     DEC2   57.97    +0.89   57.81   58.60   12166
  NYMEX CRUDE      OCT2   97.18    +0.71   96.01   97.37   35990
  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 = 3.106 ringgit)

 (Writing by Chew Yee Kiat; Editing by Miral Fahmy)

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