RTRS:VEGOILS-Palm oil futures gain on weather concerns
* La Nina-driven rains may disrupt harvesting and output
* Malaysia, Indonesia meeting on CPO export tax postponed
* Euro zone debt crisis still a concern for markets
(Updates throughout)
By Niluksi Koswanage
KUALA LUMPUR, Nov 2 (Reuters) - Malaysian palm oil futures
climbed 1.2 percent on Wednesday as traders looked to a
developing La Nina weather pattern that could curb production of
the tropical oil.
La Nina-driven heavy rains at the end of the year could
coincide with the monsoon season, stalling harvesting and
supporting palm oil futures that have lost almost 22 percent so
far this year.
"We are in a weather market for sure. The southeast Asian
region has been getting more rains than usual and this will keep
the palm oil market supported in the short term," said a trader
with a foreign commodities brokerage.
Benchmark January palm oil futures FCPOc3 on the Bursa
Malaysia Derivatives Exchange settled up 1.2 percent at 2,958
ringgit ($948) a tonne after going as high as 2,966 ringgit.
Overall traded volumes stood at 23,130 lots at 25 tonnes
each, compared to the usual 25,000 lots.
For now, production appears to be strong with traders
expecting Malaysian palm oil stocks to record an increase
despite the strong export data reported for October.
But La Nina rains will curb production and force refiners to
run down stocks to meet regular orders.
"For now Sabah is not affected by the heavy rains," said a
planter in Malasyia's key oil palm growing state on Borneo
island. "But I heard that it is not so great in peninsula
Malaysia, they are expecting floods."
Indonesian government officials cancelled a meeting with
their Malaysian counterparts this week to discuss a highly
anticipated review on export taxes on crude palm oil, creating
more uncertainty in the industry.
"It's most likely to take place at the end of November,"
said a Malaysian government official who declined to be named.
"We hope there will be no further delay."
Malaysia, the world's No 2 producer, says its refiners are
suffering a price disadvantage after Jakarta slashed refined
palm oil export duties and tariffs for the crude grade to keep
more of the feedstock in Indonesia for processing.
Related markets were up.
Brent crude bounced on Wednesday after three days of losses,
supported by hopes that the Federal Reserve may hint at more
measures to boost the U.S. economy, though it was seen
vulnerable to euro zone debt worries.
U.S. soyoil for December delivery also reversed
losses in Asian trade although global economic concerns and the
rapid harvest of soybeans weighed. China's most active May 2012
soybean oil contract <0#DBY:> edged higher.
"The soyoil market is more or less flat today .
fundamentally there are not many influencing factors right now,"
said Zhang Ruming, research manager at Liangyun Futures.
"But most investors will probably look out for the outcome
of the parliamentary confidence vote in Greece this Friday," he
said, referring to the shock move by Greece to hold a referendum
on its bailout package.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV1 2965 +40.00 2960 2970 67
MY PALM OIL DEC1 2962 +37.00 2923 2965 2004
MY PALM OIL JAN2 2958 +35.00 2922 2966 12369
CHINA PALM OLEIN MAY2 8010 +54.00 7844 8020 119908
CHINA SOYOIL MAY2 9268 +52.00 9100 9274 454354
CBOT SOY OIL DEC1 51.13 +0.33 50.41 51.25 6458
NYMEX CRUDE DEC1 92.54 +0.35 90.97 93.20 20654
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
