Friday, July 30, 2010

VEGOILS-Palm oil off 3-month highs after weather rally

(3 August 2010)
* Palm eases on profit-taking but weather concerns support
* Players eye July production data
* July palm oil output seen up 3-4 pct vs June

KUALA LUMPUR, Aug 3 (Reuters) - Malaysia crude palm oil
futures settled down 0.31 percent on Tuesday, slipping off
three-and-a-half month highs of the previous day as investors
who had bet on a weather-driven rally closed their positions.
Palm oil has clawed back some of its losses so far this year
due to mounting concerns about the effect of dry weather on
rival soy crops in the U.S. and European rapeseed and to heavy
rains that disrupted palm oil production.
The benchmark October contract on Bursa Malaysia
Derivatives Exchange closed down 8 ringgit or 0.31 percent at
2,562 ringgit ($811) per tonne. The previous day, the market hit
a level of 2,583 ringgit, a level unseen since April 9.
Overall traded volume rose to 17,244 lots of 25 tonnes each,
compared with the usual 10,000 lots.
"It's more of a profit-taking after gaining in five days.
But the market is still firm," said a trader in a foreign
brokerage in Kuala Lumpur.
On Monday, cargo surveyor Societe Generale de Surveillance
reported a 4.7 percent increase in Malaysia's July palm oil
exports, driven by higher demand from Pakistan for the Muslim
fasting month of Ramadan in mid-August. [PALM/SGS]
Reuters technical analysis showed Malaysia's October
contract is likely to consolidate between 2,540 ringgit and
2,580 ringgit per tonne as its rise is seen as weak.
But traders expect palm oil prices to derive support from
from crude oil and global weather woes.
Market players also await fresh leads from a slew of key
palm oil data, including July's production from Malaysian Palm
Oil Board next week.
"Nobody wants to sell down the market in a big way until
MPOB data is out, which is expected to be bullish because July
output is seen only increasing by 3 to 4 percent," another
trader said.
Monthly palm oil output normally can increase 5-7 percent as
it enters high production season in July-September, but yields
were reduced by hot weather with the event of El Nino last year
followed by a brewing La Nina, which brings more rains in
Southeast Asia palm oil producing countries.
Oil prices slipped back from three-month highs towards $81
on Tuesday as stock markets consolidated ahead of key U.S.
economic data.
Firmer crude supported other vegetable oils. U.S. soyoil for
September delivery barely moved in Asian hours, while the
most-active May soyoil contract on China's Dalian
Commodity Exchange rose 0.48 percent.
"Although edible oils demand for mid-autumn festival and
National day has risen recently, it is minimal," said a
Shanghai-based oil analyst.
China will celebrate the festival and National day in late
September and early October.

Jakarta-based PT KBN Nusantara, formerly known as the state
marketing centre, sold 4,500 tonnes of crude palm oil in an
auction on Tuesday, with the top price at 7,773 rupiah ($0.869)
per kg, against 7,806 rupiah per kg the previous day.[OILS/TEND]
Producers in Medan, home to Indonesia's main palm oil export
port of Belawan in Sumatra island, sold crude palm oil at 7,780
rupiah per kg. There was no palm oil auction in Medan on Monday.
Refiners in Jakarta offered refined, bleached, deodorised
(RBD) palm olein -- used as cooking oil -- at 8,050-8,100 rupiah
per kg, against 8,000 rupiah per kg on Friday.

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