RTRS:VEGOILS-Palm oil rises to 1-week high on stimulus hopes
* Malaysia to boost tax free palm oil quota by 2 mln T -govt sources
* Market eyes crop deterioration in USDA report
* Malaysia July palm oil export data due Tuesday
(Updates prices)
By Chew Yee Kiat
SINGAPORE, July 30 (Reuters) - Malaysian crude palm oil edged to a one-week
high on Monday, tracking gains in broader financial markets on expectations the
Federal Reserve and European Central Bank (ECB) will announce new measures to
encourage growth, boosting commodity demand.
Persistent drought in the U.S. Midwest that threatened soy crop yields also
supported prices, with traders expecting a crop downgrade in the weekly progress
report by the U.S. Department of Agriculture (USDA), due later on Monday.
Tighter soy crop supply leading to less soybean oil could shift vegetable
oil demand to the cheaper palm oil.
"Euro zone worries have eased a little and rain that was anticipated in the
U.S. did not match expectations," said a Singapore-based trader with a foreign
commodities house. "But we will have to wait and see tonight's USDA crop
progress report for price direction."
The benchmark October palm oil futures on the Bursa Malaysia
Derivatives Exchange closed 2.7 percent higher at 3,005 ringgit ($954) per
tonne. Prices earlier touched 3,007 ringgit, the highest level since July 23.
Traded volume stood at 24,699 lots of 25 tonnes each, a tad lower than the
usual 25,000 lots.
Technicals turned bullish as palm oil broke a resistance at 2,987 ringgit
and could trigger a gain to 3,021 ringgit, Reuters market analyst Wang Tao said.
Investors are hoping Fed and ECB policy meetings this week will produce
stimulus measures, especially after ECB President Mario Draghi pledged he would
do whatever it takes to safeguard the euro.
On the local front, market players will be looking out for Malaysia's July
palm oil export data after earlier numbers showed signs of slowing demand.
Malaysia's palm oil exports fell 14.3 percent and 18.6 percent over the July
1-25 period, according to cargo surveyors Intertek Testing Services and Societe
Generale de Surveillance respectively.
Malaysia will increase shipping quotas for tax free crude palm oil by up to
2 million tonnes this year to help planters cope with higher output in the next
few months, government sources said, as the world's No.2 supplier struggles to
maintain its export momentum.
Brent crude oil fell to around $106 a barrel on Monday, erasing early gains,
boosting palm oil prospects to be used as biodiesel.
Other vegetable oil markets also extended gains thanks to the better
macroeconomic outlook.
By 1007 GMT, the most active U.S. soyoil contract for December
delivery had inched up 1.2 percent and the most active January 2013 soyoil
contract on the Dalian Commodity Exchange had jumped 1.7 percent.
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG2 2985 +84.00 2910 2985 517
MY PALM OIL SEP2 2994 +79.00 2950 2998 2444
MY PALM OIL OCT2 3005 +78.00 2958 3007 16473
CHINA PALM OLEIN JAN3 7852 +136.00 7784 7924 285630
CHINA SOYOIL JAN3 9524 +158.00 9464 9592 584350
CBOT SOY OIL DEC2 53.42 +0.61 53.01 53.70 9703
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
