* Palm on track to post worst weekly performance since
* Higher output could lift stocks in September -trader
* Palm oil neutral in 2,323-2,361 ringgit range -technicals
(Updates prices, recasts lead)
By Anuradha Raghu
KUALA LUMPUR, Sept 13 (Reuters) - Malaysian palm oil futures
edged up on Friday, as buying interest surged after prices fell
to the lowest in more than three weeks, although fears remained
that stocks of the tropical oil would surge.
Despite the gain, palm oil futures still posted their worst
weekly performance in more than two months after forecasts of
rising output in Southeast Asia raised concerns over rising
Traders and analysts warn that inventory levels in Malaysia,
the world's No.2 producer, may climb higher from September
onwards as steadily higher production outweigh exports.
Investors also turned bearish after leading industry analyst
Dorab Mistry said Indonesia and Malaysia will seasonally produce
more palm oil until at least until April 2014. Mistry said this
would add to the supply of competing oilseeds and drag palm
prices to new lows in January.
"We're moving into the high production period. People are
foreseeing that output will go up in September, followed by a
rise in the end-stocks," said a trader with a foreign
"It has put a damper on the market. I'm looking at a range
of 2,300-2,370 ringgit for the next 1-2 days."
The benchmark November contract on the Bursa
Malaysia Derivatives Exchange gained 0.2 percent to close at
2,349 ringgit ($715) per tonne on Friday, recovering from its
intraday low at 2,306 ringgit, a level unseen since Aug. 20.
Prices for the week have dropped 3.9 percent, posting their
worst weekly performance since end-June.
Total traded volumes stood at 30,848 lots of 25 tonnes each,
below the average 35,000 lots.
Technicals showed palm oil looks neutral in a range of
2,323-2,361 ringgit per tonne, and an escape will indicate a
direction, says Reuters market analyst Wang Tao.
Malaysian palm oil stocks at end-August stood at 1.67
million tonnes, almost flat from the 1.66 million tonnes at
end-July, as healthy consumption for festivals such as the
Muslim Eid al-Fitr and China's Mid-Autumn celebrations offset an
increase in output.
Traders, however, say export demand may dwindle now that the
festive season is over.
Cargo surveyors will release export data for the first 15
days of September next Tuesday. Malaysian markets will be closed
on Monday for the Malaysia Day holiday.
In other markets, Brent crude oil fell below $112 a barrel
on Friday as the U.S. and Russian foreign ministers met in
Geneva to work out a deal to avert a Western military strike on
Syria, easing fears of a wider war in the Middle East.
In vegetable oil markets, the U.S. soyoil contract for
December fell 0.3 percent in late Asian trade. The
most-active January soybean oil contract on the Dalian
Commodities Exchange edged down 0.4 percent.
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 0 +0.00 0 0 0
MY PALM OIL OCT3 2361 +10.00 2320 2365 801
MY PALM OIL NOV3 2349 +5.00 2306 2361 15900
CHINA PALM OLEIN JAN4 5470 -32.00 5446 5580 528066
CHINA SOYOIL JAN4 7196 -28.00 7172 7304 880074
CBOT SOY OIL DEC3 42.87 -0.16 42.76 43.29 7082
NYMEX CRUDE OCT3 107.57 -1.03 107.31 108.74 18436
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=3.287 Malaysian ringgit)
(Additional reporting by Chew Yee Kiat; Editing by Tom Hogue
and Jijo Jacob)
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