* Market awaits Sept. output due Thursday
* Prices climb to 2,371 rgt in late trade, highest since
* Palm oil targets 2,401 ringgit- technicals
* Indonesian biodiesel policy will keep stocks in
By Anuradha Raghu
KUALA LUMPUR, Oct 9 (Reuters) - Malaysian palm oil futures
climbed to their highest level in four weeks on Wednesday as
investors bet a key industry report would show that palm stocks
and output growth in September were lower than anticipated.
Industry regulator the Malaysian Palm Oil Board (MPOB) will
release official data on September's palm stocks, production and
exports in the world's second-largest grower on Thursday.
The market has been buoyed by a Reuters survey on Monday
that put end-September stocks at a six-month high of 1.91
million tonnes, but that is still below some estimates.
"There's some position-squaring ahead of the MPOB report,"
said a Malaysian trader with a local commodities brokerage.
"But it looks like the current prices have factored in most
of the bullish news. I anticipate the upside will be capped
between 2,360-2,370 ringgit until more is known about
September's production," the trader added.
The benchmark December contract on the Bursa
Malaysia Derivatives Exchange touched 2,371 ringgit ($741) in
late Wednesday trade, its highest since Sept. 10, before easing
to 2,368 ringgit by the close, up 0.8 percent from the previous
Total traded volume stood at 25,983 lots of 25 tonnes each,
much lower than the usual 35,000 lots.
Technicals showed a bullish target at 2,401 ringgit per
tonne remains unchanged for Malaysian palm oil as
indicated by an inverted head-and-shoulders and a Fibonacci
retracement analysis, Reuters market analyst Wang Tao
The weaker local currency in late trade also supported
prices, making the feedstock cheaper for overseas buyers. The
Malaysian ringgit inched down 0.17 percent against the
Analysts say palm oil prices, which are still down about 3
percent this year, may have found a floor, helped by top
producer Indonesia's ambitious biodiesel policy that could mean
more of the tropical oil will be used in making biofuels.
"This will ensure that any significant palm oil supply
increase can be converted into biodiesel, and hence keep
inventory levels in check," said Kenanga Investment Bank analyst
Alan Lim in a report on Wednesday.
He forecast average crude palm oil prices in 2013/14 would
range between 2,400-2,700 ringgit per metric tonne.
In other markets, global oil prices dropped below $110 per
barrel on Wednesday after U.S. lawmakers made little progress to
end a budget impasse that threatens to hurt investor confidence
and curb demand in the world's biggest oil consumer.
In competing vegetable oil markets, the U.S. soyoil contract
for December rose 0.1 percent in late Asian trade. The
most active January soybean oil contract on the Dalian
Commodities Exchange rose 0.9 percent.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2365 +15.00 2354 2365 165
MY PALM OIL NOV3 2370 +21.00 2351 2370 2002
MY PALM OIL DEC3 2368 +19.00 2350 2371 12034
CHINA PALM OLEIN JAN4 5528 +32.00 5506 5564 321544
CHINA SOYOIL JAN4 7056 +66.00 7006 7088 630160
CBOT SOY OIL DEC3 40.46 +0.03 40.35 40.61 5759
NYMEX CRUDE NOV3 103.46 -0.03 103.19 103.75 11797
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=3.198 Malaysian ringgit)
(Editing by Richard Pullin and Alan Raybould)
- Commodity Markets
- Palm oil
- Malaysian Palm Oil Board
- Malaysian ringgit