BLBG:VEGOILS-Palm at near 5-mth high on favourable fundamentals
* Euro zone debt fears ease to boost investor sentiment
* Monsoon and La Nina weather to hit output in fourth
quarter
* Benchmark prices rise 1.6 pct to peak at 3,185 ringgit
JAKARTA, Nov 14 (Reuters) - Malaysian palm oil futures
climbed to a near five-month high on Monday as sentiment on euro
zone debt problems improved, with supply and demand fundamentals
offering further support for the edible oil.
Benchmark January palm oil futures on the Bursa
Malaysia Derivatives Exchange traded 1.2 percent higher at 3,173
Malaysian ringgit ($1,009). Prices earlier touched a peak at
3,185, a level not seen since June 22.
Traded volumes for the January palm contract were at
2,790 lots of 25 tonnes each, compared with 15,922 lots on
Friday.
"The market is pretty firm," said a Kuala Lumpur-based
trader. "Everything is up because the sovereign debt issue in
Europe abated temporarily."
He added that prices are likely to push through the 3,200
level later this week.
A bullish target at 3,240 ringgit per tonne is unchanged for
Malaysian palm oil based on a channel technique, Reuters analyst
Wang Tao said.
Asian stocks and the euro rose on Monday on hopes that new
technocratic leaders in Italy and Greece will take decisive
action to save their indebted nations from bankruptcy and fend
off a wider financial meltdown in the euro zone.
Many other commodities rose as risk sentiment improved.
U.S. soyoil for December delivery gained in Asian
trade, while China's most active May 2012 soybean oil contract
<0#DBY:> also climbed.
Brent crude held above $114, extending the gains
of the previous week on hopes of steady demand growth as
concerns over Europe's debt crisis eased.
Benchmark palm prices have fallen about 15 percent this
year, partly due to the uncertain global economic picture and
demand outlook.
Palm oil sentiment is improving, despite the macro outlook,
due to lower production expectations from the fourth quarter, as
dominant Southeast Asian producers enter the rainy season.
"The Malaysian weather the next few days is raining," added
the trader. "We expect strong demand coming in, with monsoon
season leading to lower production."
A weaker version of La Nina may also reappear this year and
if the weather pattern develops at the end of this year, it
could coincide with the rainy season in top palm oil producers
Indonesia and Malaysia.
Last week, Malaysia's government reported a 1.6 percent
decline in stocks on the back of strong exports.
Cargo surveyors Intertek Testing Services and Societe
Generale de Surveillance issue Malaysian palm oil exports data
for Nov. 1-15 on Tuesday.
"The lower-than-expected palm oil stocks at end-Oct will
reinforce the current strength in CPO price, the root cause of
which is worries over weather uncertainties," CIMB analysts said
in a note.
"But we do not expect the weather concerns to be sustained
beyond 1Q12 when La Nina is expected to go away."
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1 = 3.142 ringgit)
(Reporting by Michael Taylor; Editing by Michael Urquhart)
