VEGOILS-Palm rises to 1-1/2 month high, lifted by overseas soy markets

Reuters

(Updates prices, adds Indonesian export tax)

* Palm hovers near 1-1/2-month high of 2,446 ringgit in

early trade

* Malaysia's Oct 1-20 palm oil exports up 3-8 pct -surveyors

* Palm tracks gains in China, U.S. soy markets -trader

* Palm oil may retrace to 2,406 ringgit -technicals

By Anuradha Raghu

KUALA LUMPUR, Oct 21 (Reuters) - Malaysian palm futures

jumped on Monday to their highest in 1-1/2 months, lifted by

gains in the U.S. and Chinese soy markets after positive

economic data from the Asian giant signalled growing demand for

food and fuel.

The U.S. soyoil contract for December rose 0.5

percent in late Asian trade, while the most-active January

soybean oil contract on the Dalian Commodities Exchange

rose 1.5 percent.

The palm market generally tracks soyoil, a competing

vegetable oil used as a substitute for the tropical oil.

"The market is up on the back of China and U.S. soybean oil

markets," said a trader with a foreign commodities brokerage.

"Now it's holding at 2,400 ringgit, which is a strong

short-term support level," the Kuala Lumpur-based trader added.

Demand for palm was also seen steady, lending support to

prices.

Exports of Malaysian palm oil during Oct. 1-20 rose three

percent to 1,026,488 million tonnes, cargo surveyor data showed

early Monday, boosted by buying from Europe and China.

.

Another cargo surveyor, Societe Generale de Surveillance

showed exports rose 8 percent compared to the same period a

month ago.

By Monday's close, the benchmark January contract

on the Bursa Malaysia Derivatives Exchange had extended the

morning's gains to stand up 1.5 percent at 2,437 ringgit ($769)

per tonne. Prices earlier rose to 2,446 ringgit, the highest

level since Sept. 9.

Total traded volume stood at 25,240 lots of 25 tonnes each,

much lower than the usual 35,000 lots.

Technicals are bearish. Malaysian palm oil faces resistance

at 2,449 ringgit per tonne and may retrace to 2,406 ringgit,

Reuters market analyst Wang Tao said. But he added that a rise

to 2,461 ringgit could confirm a break above resistance, leading

to a new resistance target of 2,491 ringgit.

Gross domestic product in China's giant economy rose 7.8

percent from a year earlier, its quickest pace this year, giving

a boost to commodity markets including oil.

"The positive outlook in China's economy is likely to

support demand for the commodity," Phillip Futures analyst Tan

Chee Tat said in a note on Monday, noting that China is the

world's second-largest palm oil consumer after India.

Palm oil prices have climbed 5 percent so far in October,

fuelled by optimism that output volumes in Malaysia, the world's

second-largest producer, may not surge as much as estimated.

Traders and planters say despite being expected to be the

highest-producing month this year, October's pace may show only

a tiny increase, leaving stocks below the 2-million-tonne mark.

Stocks now stand at 1.78 million tonnes.

Indonesia, the world's top palm oil producer, kept its

export tax for crude palm oil unchanged at 9 percent for

November, an official at the industry ministry said. Malaysia

will keep its tax at 4.5 percent.

Investors also await the release of nearly three weeks of

delayed USDA data, including export sales figures likely to show

nearly 3 million tonnes of soybeans were sold to overseas

buyers.

In other markets, oil fell on Monday amid pressure from

strong supplies, with losses limited by expectations that the

U.S. Federal Reserve will delay reining in its money-printing

programme until next year, helping shore up the demand outlook.

Palm, soy and crude oil prices at 1011 GMT

Contract Month Last Change Low High Volume

MY PALM OIL NOV3 2432 +40.00 2417 2432 388

MY PALM OIL DEC3 2439 +40.00 2417 2443 3984

MY PALM OIL JAN4 2437 +36.00 2418 2446 13307

CHINA PALM OLEIN MAY4 6154 +170.00 6058 6186 652638

CHINA SOYOIL MAY4 7258 +108.00 7216 7290 683474

CBOT SOY OIL DEC3 41.89 +0.21 41.67 42.09 5668

NYMEX CRUDE NOV3 99.79 -1.02 99.77 100.95 4777

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=3.17 Malaysian ringgit)

(Editing by Anupama Dwivedi)

View Comments (0)