VEGOILS-Palm hits 8-mth high on technical trades, output worries

Reuters

* Prices hit 2,573 ringgit - highest since Feb. 20

* Palm prices to target 2,630 ringgit - technicals

* Palm boosted by technical trading, output concerns -

traders

(Adds closing prices)

By Michael Taylor

JAKARTA, Oct 30 (Reuters) - Malaysian palm oil futures rose

to their highest level in eight months on Wednesday, supported

by technical trading and expectations that wet weather may hit

production in dominant Southeast Asian producers in the coming

months.

By the close, the benchmark January contract on the

Bursa Malaysia Derivatives Exchange ended up 1.8 percent at

2,543 ringgit ($810) per tonne.

"The market is pretty strong," said a trader with a foreign

commodities brokerage. "We are going into the monsoon season and

Malaysian production is likely to go down."

Both Malaysia and Indonesia, which account for about 90

percent of the world's palm oil production, are now entering

their monsoon weather season.

Benchmark prices earlier touched 2,573 ringgit per tonne,

their highest since Feb. 20. Total traded volume stood at 49,517

lots of 25 tonnes each, above the usual 35,000 lots.

Technicals showed Malaysian palm oil has a good chance of

rising towards 2,630 ringgit, once it had broken above a

resistance at 2,544 ringgit per tonne, said Reuters market

analyst Wang Tao.

"I can't put a finger on it -- probably a technical move

today," said a second trader with foreign commodities brokerage.

"I don't see any big changes to the fundamentals."

Competing vegetable oil markets also rose, traders said,

with the U.S. soyoil contract for December rising 1.3

percent in early trade. The most-active May soybean oil contract

on the Dalian Commodities Exchange rose 2 percent.

In other markets, Brent crude held firm near $109 a barrel

as a bigger-than-expected increase in oil inventories in the

United States was overshadowed by export disruptions in

Libya.

Palm traders were also positioning themselves ahead of data

due on Thursday. Cargo surveyors Intertek Testing Services and

Societe Generale de Surveillance will release Malaysia's October

palm oil export data on Oct. 31.

"Production is much lower than expected," said a

Jakarta-based palm trader. "The bumper crop has not happened.

"Some people still hope that production will increase from

December to January, but most are losing confidence on this now

happening."

Palm, soy and crude oil prices at 1024 GMT

Contract Month Last Change Low High Volume

MY PALM OIL NOV3 2585 +58.00 2557 2590 266

MY PALM OIL DEC3 2555 +48.00 2531 2582 4517

MY PALM OIL JAN4 2543 +45.00 2520 2573 25671

CHINA PALM OLEIN MAY4 6332 +242.00 6166 6332 1057172

CHINA SOYOIL MAY4 7214 +142.00 7106 7268 1572360

CBOT SOY OIL DEC3 41.51 +0.54 40.88 41.80 9336

NYMEX CRUDE DEC3 97.49 -0.71 97.40 97.82 19463

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 = 3.1455 ringgit)

(Editing by Gopakumar Warrier)

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