Vegoils Palm touches 6-wk high on technical buying, short-covering

by **Cals** Thu 10 Sep 2015, 00:48

Vegoils

[size=28]Palm touches 6-wk high on technical buying, short-covering

By Reuters / Reuters | September 9, 2015 : 7:14 PM MYT

JAKARTA (Sept 9): Malaysian palm oil futures hit a six-week high on Wednesday, supported by short-covering and technical buying ahead of production data due later this week.

By the close, the benchmark November contract on the Bursa Malaysia Derivatives exchange ended 1.1% higher at 2,114 ringgit (US$489) a tonne.

Earlier palm rose to 2,132 ringgit, its strongest level since July 29, and prices have now gained 6% this month.

Traded volume stood at 49,876 lots of 25 tonnes each, above the average 35,000 lots.

"The market is up and breaking new highs," said a trader based in Kuala Lumpur. "There is a lot of speculative buying and short-covering going on but it's more technical."

The Malaysian Palm Oil Board is set to release production and stocks data for August on Thursday, he said, adding that many traders are expecting the outlook to be bearish.

Palm oil is expected to test resistance at 2,113 ringgit per tonne, a break above which could lead to a further gain to 2,171 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.

A weak Malaysian ringgit, which makes palm cheaper for offshore buyers, has offered limited support to palm oil in recent weeks.

The ringgit has lost almost 20% so far this year, and is emerging Asia's worst performing currency.

"Prices are in short-covering mode," said a second palm trader, citing market talk that a weekly U.S. government report may lower its crop rating.

"The weaker ringgit and improved external markets are certainly the catalyst."

In other vegetable oil markets, the most active January soybean oil contract on the Dalian Commodity Exchange was 0.8% higher, the U.S. December soyoil contract was up 0.4% in late Asian trade.

In other oils, stronger stock markets helped stabilise crude prices, yet concerns about oversupply persisted.

Palm oil often takes price direction from crude oil, as vegetable oils are increasingly used in making renewable fuels.

Palm, soy and crude oil prices at 1029 GMT

[/size]

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	SEP5	2015	+21.00	2005	2015	105
MY PALM OIL	OCT5	2057	+18.00	2035	2073	2043
MY PALM OIL	NOV5	2114	+22.00	2086	2132	20653
CHINA PALM OLEIN	JAN6	4326	+66.00	4310	4378	741706
CHINA SOYOIL	JAN6	5404	+44.00	5398	5438	584294
CBOT SOY OIL	DEC5	27.28	-0.40	27.10	27.44	9274
INDIA PALM OIL	SEP5	382.60	-0.40	382.30	388.10	1522
INDIA SOYOIL	OCT5	560.55	-5.40	560.30	568.00	63210
NYMEX CRUDE	OCT5	45.67	-0.27	45.52	46.26	37337

[size]

  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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel

(US$1 = 4.3230 ringgit)
(US$1 = 66.3500 Indian rupees)
(US$1 = 6.3768 Chinese yuan)

[/size]