RTRS:VEGOILS-Palm oil jumps, set to post first weekly gain in five
* Palm oil on track for 5 pct weekly gain, best this year
* Prices touch 2,392 ringgit, last seen on Dec. 3
* Palm oil to test resistance at 2,381 ringgit -technicals
(Updates prices, adds detail)
By Chew Yee Kiat
SINGAPORE, Dec 21 (Reuters) - Malaysian palm oil futures
touched a near three-week high on Friday and looked set for
their first weekly gain in five as traders sought to cover short
positions amid optimism for a zero export tax on crude palm oil
in early 2013 to cut stocks.
Palm oil is on track to post a 5.1 percent gain on the week,
its best performance this year, after the edible oil suffered
four straight weeks of losses on record high stocks.
"There's a technical break above the resistance level at
2,381 ringgit per tonne, and prices should remain supported
above the 2,370 ringgit level," said a dealer with a foreign
commodities brokerage in Malaysia. "One factor could be the
pre-weekend short cover."
By the midday break, the benchmark March contract
on the Bursa Malaysia Derivatives Exchange was up 3 percent
percent to 2,391 ringgit ($781) per tonne, just off a high at
2,392 ringgit, a level last seen on Dec. 3.
Total traded volumes stood at 14,534 lots of 25 tonnes each,
higher than the usual 12,500 lots.
Technical analysis showed palm oil is expected to test
resistance at 2,381 ringgit per tonne and a bullish target at
2,419 ringgit has been established, Reuters market analyst Wang
Tao said.
A small surprise increase in Malaysia's palm exports for the
first 20 days of the month also injected cheer in the market,
with cargo surveyor Societe Generale de Surveillance reporting a
slight increase of 0.5 percent in shipments for the period from
a month ago.
A jump in crude palm oil exports during the period, which
shows companies are pushing out exports ahead of the year-end
expiry of their duty-free quota, could help ease record-high
stocks in the No.2 palm producer.
Analysts, however, cautioned against an overly optimistic
view on inventory levels, citing lower demand from the northern
hemisphere, where the edible oil tends to solidify in winter.
"Hence, despite the expected December month-on-month
production decline of 12 percent, inventory should stay
persistently high at above 2.5 million tonnes," Alan Lim Seong
Chun, an analyst with Malaysia's Kenanga Investment Bank, said
in a research note on Friday.
"Looking ahead to first quarter 2013, we expect the
inventory to decline only marginally and to stay above 2 million
tonnes and limit the price upside to below 3,000 ringgit."
Brent crude fell toward $109 a barrel on Friday after talks
stalled in Washington to avert a "fiscal cliff" before the end
of the year, stoking worries about demand from the world's
biggest oil consumer.
Palm oil prices were supported by gains in competing
vegetable oil markets. U.S. soyoil for January delivery
gained 1.3 percent in early Asian trade. The most active May
2013 soybean oil contract on the Dalian Commodity
Exchange was trading 0.4 percent higher.
Palm, soy and crude oil prices at 0547 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN3 2256 +55.00 2199 2256 258
MY PALM OIL FEB3 2328 +63.00 2271 2329 1925
MY PALM OIL MAR3 2391 +70.00 2326 2392 7844
CHINA PALM OLEIN MAY3 6822 +108.00 6706 6828 519950
CHINA SOYOIL MAY3 8612 +32.00 8550 8624 431398
CBOT SOY OIL MAR3 48.94 +0.63 48.41 49.02 5627
NYMEX CRUDE FEB3 89.12 -1.01 88.93 90.07 13502
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
