Vegoils Palm hits 1-mth high on weaker-than-expected stocks, output

by **Cals** Thu 10 Oct 2013, 21:19

Vegoils Palm hits 1-mth high on weaker-than-expected stocks, output

Business & Markets 2013

Written by Reuters

Thursday, 10 October 2013 19:04

KUALA LUMPUR (Oct 10): Malaysian palm oil futures climbed to their highest in more than a month on Thursday, reversing the morning's losses and posting their fifth straight day of gains after an industry report showed inventories in September were less than expected.

Palm oil stocks in Malaysia, the world's second-largest producer, notched a smaller-than-expected rise in September as output of the tropical oil grew more slowly than anticipated, data from the Malaysian Palm Oil Board showed on Thursday.

Production rose 10.2 percent, less than the 15 percent rise forecast in a Reuters poll of traders and PLANTATION [] firms. End-stocks rose 7 percent to 1.78 million tonnes, below estimates for a 14.8 percent rise to 1.91 million tonnes.

"From this report we can conclude that prices henceforth will rally towards 2,600 ringgit by the fourth quarter of 2013," said a trader with a local commodities brokerage in Malaysia.

The benchmark December contract on the Bursa Malaysia Derivatives Exchange climbed as high as 2,394 ringgit ($750) in afternoon trading, its highest since Sept. 9. The contract closed at 2,388 ringgit, up 0.9 percent.

Total traded volume stood at 35,454 lots of 25 tonnes each, compared to the usual 35,000 lots.

Technicals showed Malaysian palm oil still targets 2,401 ringgit per tonne, as indicated by an inverted head-and-shoulders and a Fibonacci retracement analysis, Reuters market analyst Wang Tao said.

Demand for palm oil has been robust, thanks to Hindu and Muslim religious festivals that will be celebrated in November.

Festive demand typically drives up consumption of the tropical oil commonly used in many food products including biscuits, chocolate and ice cream.

Cargo surveyor data earlier showed that exports of the tropical oil surged 17.2 percent in the Oct. 1-10 period compared to a month ago, thanks to increased purchases from the world's top two palm oil buyers, India and China.

Another cargo surveyor Societe Generale de Surveillance will release data for the same period late Thursday.

In other markets, Brent crude oil rose to near $110 per barrel as the kidnapping of Libya's prime minister delayed the prospect of a further recovery in production from the North African nation.

In competing vegetable oil markets, the U.S. soyoil contract for December rose 0.8 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.6 percent.

Palm, soy and crude oil prices at 1023 GMT
Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	OCT3	2390	+21.00	2380	2390	58
MY PALM OIL	NOV3	2390	+22.00	2360	2391	1698
MY PALM OIL	DEC3	2388	+19.00	2359	2394	15761
CHINA PALM OLEIN	JAN4	5610	+74.00	5530	5632	511818
CHINA SOYOIL	JAN4	7096	+40.00	7058	7104	628370
CBOT SOY OIL	DEC3	41.00	+0.33	40.66	41.18	8241
NYMEX CRUDE	NOV3	102.02	+0.42	101.39	102.27	23370

[color]
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 = 3.200 ringgit)[/color]