Vegoils Palm rises to 3-week high as output worries ease

by **Cals** Wed 09 Oct 2013, 01:51

Vegoils Palm rises to 3-week high as output worries ease

Business & Markets 2013

Written by Reuters

Tuesday, 08 October 2013 18:24

* Prices climb to 2,353 rgt in late trade, highest since Sept. 17
* Palm oil may keep on rising to 2,401 ringgit - technicals
* "Huge crops" might not materialize yet - trader
* Malaysian end-stocks seen at 1.91 mln T - Reuters survey

KUALA LUMPUR (Oct 8): Malaysian palm oil futures rose to their highest in nearly three weeks on Tuesday, posting three straight days of gains, after a market survey showed palm stocks and output in the world's No.2 producer may be lower than investors had initially feared.

A Reuters survey on Monday showed that Malaysian palm oil inventories may have climbed to a six-month high of 1.91 million tonnes at the end of September, lifted by a 15 percent surge in production.

Market players are wary that seasonally stronger output and quicker harvesting in September would trump export demand and lead to stockpiles that could quickly grow to record highs again.

"The market had been talking about huge crops, but maybe it might not materialize in September," said a trader with a foreign commodities brokerage.

By Tuesday's close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had inched up 1.4 percent to 2,351 ringgit ($735) per tonne. Prices had climbed to 2,353 ringgit, the highest since Sept. 17.

Trade was also more lively as Chinese markets, including the Dalian Commodities Exchange, resumed trading after a week-long national holiday, traders said.

Total traded volume stood at 31,954 lots of 25 tonnes each, compared with the average 35,000 lots.

Technicals showed Malaysian palm oil had climbed above the Oct. 2 high of 2,334 ringgit, and may keep on rising towards 2,401 ringgit, Reuters market analyst Wang Tao said.

In competing markets, the U.S. soybean market registered modest gains in the past few sessions, finding support after private analytics firm Informa Economics lowered its estimate for U.S. production of the oilseed.

Tighter supply of soybeans for crushing into soyoil could shift demand to palm oil, a rival vegetable oil.

The U.S. soyoil contract for December rose 0.7 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.4 percent.

In other markets, Brent crude oil held above $109 a barrel on Tuesday as the oil supply outlook improved and the U.S. budget crisis continued to cloud the outlook for demand in the world's biggest oil consumer.

Palm, soy and crude oil prices at 1006 GMT

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	OCT3	2350	+0.00	2346	2364	238
MY PALM OIL	NOV3	2353	+31.00	2334	2353	3969
MY PALM OIL	DEC3	2351	+33.00	2332	2353	15639
CHINA PALM OLEIN	JAN4	5500	+108.00	5380	5556	444452
CHINA SOYOIL	JAN4	7000	+30.00	6918	7044	518356
CBOT SOY OIL	DEC3	40.17	+0.27	39.91	40.48	10707
NYMEX CRUDE	NOV3	103.82	+0.79	102.85	103.84	13581

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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=3.199 Malaysian ringgit)[/color]