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VEGOILS-Palm slips but posts best monthly gain since Dec 2010
August 30, 2013 / 10:47 AM / in 4 years

VEGOILS-Palm slips but posts best monthly gain since Dec 2010

* Prices up 7.5 pct in August
    * Intertek Testing Services to release Aug export data on
    * Biodiesel policies to increase local palm consumption

 (Updates prices)
    By Chew Yee Kiat
    SINGAPORE, Aug 30 (Reuters) - Malaysian palm oil futures
eased on Friday as investors booked profits from this week's
rally that was fuelled by forecasts of dry weather in the
soy-producing U.S. Midwest, although healthy demand and a
still-weak ringgit stemmed the decline. 
    Bullish factors from expectations of lower soy yields to a
weaker ringgit have lifted palm oil this month, sending the
tropical oil to its best monthly performance since December 2010
with a 7.5 percent gain.
    Palm oil is a close substitute of soybean oil. A weak
ringgit currency that helps improve margins for overseas buyers
has also supported prices.
    Investors also expect August exports to be higher compared
to the prior month's after a 7 percent rise during the first 25
days. Cargo surveyor Intertek Testing Services will release the
full month's export data on Saturday.
    "Optimism on August exports capped the downside ... But any
negative surprise on exports will pressure the market once more
as it is still overbought," said a dealer with a foreign
commodities brokerage in Kuala Lumpur.     
    On Friday, the benchmark November contract on the
Bursa Malaysia Derivatives Exchange lost 1.5 percent to close at
 2,404 ringgit ($732) per tonne. Prices traded in a 2,396-2,433
ringgit range. 
    Total traded volume stood at 39,420 lots of 25 tonnes each,
higher than the average 35,000 lots.   
    Domestic consumption of palm oil in Malaysia, the world's
second-largest producer, could jump on its plans to increase 
palm oil's blend in biodiesel to 10 percent from the current 5
percent, a government official said on Friday.
    "By July 2014 the whole country will be using B5 ... we are
confident in the very near future we will be moving into B10,"
plantation industries and commodities minister Douglas Uggah
Embas told reporters at a press conference in Kuala Lumpur.
    "External demand is beyond our control. But at least
domestically, with policies executed on biodiesel, we can
increase our local consumption," he added.    
    In other markets, Brent crude oil slipped below $115 a
barrel on Friday as fears over supply disruptions in the Middle
East eased after Britain said it will not join any military
action against Syria. 
    In vegetable oil markets, the U.S. soyoil contract for
December eased 0.3 percent in late Asian trade. The
most-active January soybean oil contract on the Dalian
Commodities Exchange fell 1.3 percent.      
  Palm, soy and crude oil prices at 1003 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      SEP3    2407   -37.00    2400    2445     178
  MY PALM OIL      OCT3    2406   -38.00    2398    2432    3705
  MY PALM OIL      NOV3    2410   -30.00    2396    2433   20494
  CHINA PALM OLEIN JAN4    5554  -100.00    5532    5598  546672
  CHINA SOYOIL     JAN4    7172   -92.00    7154    7214  748472
  CBOT SOY OIL     DEC3   44.09    -0.11   43.79   44.36    5812
  NYMEX CRUDE      OCT3  108.00    -0.80  106.75  108.20   30015
  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=3.29 Malaysian ringgit)

 (Additional reporting by Anuradha Raghu; Editing by Richard
Pullin and Muralikumar Anantharaman)

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