Vegoils Palm ends at 2-wk high on stronger U.S. soyoil markets

by **Cals** Tue 21 Jan 2014, 22:41

Vegoils Palm ends at 2-wk high on stronger U.S. soyoil markets

Business & Markets 2014

Written by Reuters

Tuesday, 21 January 2014 18:56

KUALA LUMPUR (Jan 21): Malaysian palm oil futures ended higher on Tuesday, as stronger soy markets helped palm recover from early losses, although gains were still capped by worries of lacklustre demand for the tropical oil.

The U.S. soyoil contract for March rose 1.5 percent in late Asian trade, lifting benchmark palm oil values to their fourth straight day of gains.

"The U.S. soyoil market is leading the way," said a trader with a foreign commodities brokerage in Malaysia.

Palm typically tracks soy oil, a competing edible oil.

Traders said a weak Malaysian ringgit also stoked demand from overseas buyers and refiners, supporting prices.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange settled 0.4 percent higher at 2,588 ringgit ($780) per tonne. During the session, April palm oil advanced one tick higher to 2,589 ringgit, its highest since Jan. 7.

Total traded volume stood at 41,261 lots of 25 tonnes, much higher than the usual 35,000 lots.

But sluggish food and fuel demand for the tropical oil capped the rise. Weak exports could add to Malaysia's inventories, which hit a nine-month high of 1.99 million tonnes at end-December.

Cargo surveyors on Monday reported that exports of Malaysian palm oil products fell between 15 and 16 percent in the Jan. 1-20 period from a month ago, as demand by the world's biggest palm oil buyer India slackened.

"Exports are not so good. The demand is not picking up. Surprisingly China is not buying a lot, but maybe they will replenish their stocks later on," another trader with a foreign commodities brokerage in Kuala Lumpur said.

Indonesia, the world's top palm oil producer, on Tuesday cut its export tax for crude palm oil to 10.5 percent for February, down from 12 percent in the previous month.

Malaysia earlier said it will maintain its own duties for the crude grade at 5.0 percent.

In other markets, oil rose above $107 a barrel on Tuesday as the International Energy Agency raised its forecast for global oil demand this year, citing accelerating economic growth that would outstrip supply.

In other competing vegetable oil markets, the most active May soybean oil contract on the Dalian Commodities Exchange was flat in late Asian trade.

Palm, soy and crude oil prices at 1025 GMT
Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	FEB4	2571	+11.00	2542	2571	970
MY PALM OIL	MAR4	2578	+10.00	2547	2580	4885
MY PALM OIL	APR4	2588	+9.00	2556	2589	17380
CHINA PALM OLEIN	MAY4	5888	+4.00	5876	5936	387396
CHINA SOY OIL	MAY4	6666	-2.00	6662	6708	351098
CBOT SOY OIL	MAR4	38.32	+0.58	37.93	38.45	15059
NYMEX CRUDE	FEB4	94.42	+0.05	93.43	94.50	6104

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