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VEGOILS-Palm rises on dry weather fears, posts 4th straight gain
February 4, 2013 / 10:36 AM / in 5 years

VEGOILS-Palm rises on dry weather fears, posts 4th straight gain

* Dry weather in Argentina could lower global vegetable oil
    * Palm oil to keep rising to 2,639 ringgit -technicals
    * Traders eye Malaysia January palm stocks

 (Updates prices)
    By Chew Yee Kiat
    SINGAPORE, Feb 4 (Reuters) - Malaysian palm oil futures
edged up on Monday and posted a fourth straight session of
gains, tracking higher soybeans and soybean oil on persistent
concerns over dry weather in Argentina.
    U.S. soybeans were trading near a six-week high despite
scattered showers in Argentina in recent weeks that have brought
some relief to thirsty 2012/13 soybean crops, as many areas are
still suffering parched conditions, the Argentine agriculture
ministry said. 
    Lower soybean and soybean oil production could shift some
demand to the cheaper palm oil, which in turn may help ease
record stocks for the tropical oil.
    "It's the South American weather that is serving as the pull
factor," said a dealer with a foreign commodities brokerage in
Kuala Lumpur. 
    "Locally, with a continuous wide discount in cash crude palm
oil to futures, sentiment is still cautious as traders await the
expected high stocks for January."
    At the close, the benchmark April contract on the
Bursa Malaysia Derivatives Exchange had edged up 0.3 percent to
2,564 ringgit ($831) per tonne. Prices hit a 3-month high of
2,593 ringgit on Thursday.
    Total traded volumes stood at 32,005 lots of 25 tonnes each,
higher than the average 25,000 tonnes.  
    Technical analysis shows palm oil is expected to keep rising
to 2,639 ringgit, as it has cleared resistance at 2,567 ringgit
per tonne, said Reuters market analyst Wang Tao. 
    Traders are shifting their focus to Malaysia's palm oil
stocks for January, hoping that slowing production and
better-than-expected exports will bring down record stocks of
2.63 million tonnes recorded for December.
    Malaysian palm exports in January fell 7 percent from a
month ago, said cargo surveyor Intertek Testing Services, while
another surveyor, Societe Generale de Surveillance, reported a
6.4 percent fall.  
    That represented an improvement from the double-digit
decline seen in the first 20 days of January, as worries eased
over China's stricter regulation on edible oil imports after the
first cargo from Malaysia was discharged.    
    Brent crude oil consolidated above $116 per barrel on
Monday, not far off 4-1/2-month highs, on signs of improving
economic growth in the United States and China and concern over
geopolitical tension in the Middle East. 
    Other vegetable oil markets also advanced on Argentine
weather concerns. U.S. soyoil for March delivery gained
0.7 percent in late Asian trade. The most active September
soybean oil contract on the Dalian Commodity Exchange
closed 0.8 percent higher, near a three-month high.    
  Palm, soy and crude oil prices at 1006 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      FEB3    2495   -17.00    2485    2550     951
  MY PALM OIL      MAR3    2540   +12.00    2525    2563    3143
  MY PALM OIL      APR3    2564    +7.00    2552    2592   17397
  CHINA PALM OLEIN SEP3    7190   +16.00    7180    7252  479612
  CHINA SOYOIL     SEP3    8896   +66.00    8842    8932  424220
  CBOT SOY OIL     MAR3   53.37    +0.38   53.10   53.54    7532
  NYMEX CRUDE      MAR3   97.16    -0.60   97.15   97.76   10880
  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=3.092 ringgit)

 (Editing by Joseph Radford and Muralikumar Anantharaman)

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