* Palm oil prices up on Fed's aggressive economic stimulus
* Investors book positions ahead of long weekend
* Prices capped by rising inventory levels
* Palm oil to retest resistance at 2,960 ringgit-technicals
By Anuradha Raghu
KUALA LUMPUR, Sept 14 (Reuters) - Malaysian palm oil futures
rose on Friday after the U.S. Federal Reserve kicked off a third
round of quantitative easing to stimulate its economy and as
investors took up positions ahead of a long weekend.
The Fed said it will buy $40 billion of mortgage-backed debt
each month in the world's largest economy, lifting global prices
of oil, grains gold prices on expectations that global economy
and commodity demand will continue to grow.
"The market is up on the back of yesterday's QE3
announcement. The market has also been oversold for quite some
time and is now recovering a bit," said a trader with a foreign
commodities brokerage.
"There is a lot of covering ahead of a 3-day holiday," the
trader added. Local markets will be closed on Monday following
the Malaysia Day public holiday, which falls on Sunday.
The benchmark November contract on the Bursa
Malaysia Derivatives Exchange ended up 0.8 percent to 2,936
ringgit ($966.1) per tonne after going as high as 2,945 ringgit.
Total traded volume stood at 33,029 lots of 25 tonnes each,
up from the usual 25,000 tonnes as trades locked in postions
ahead of long weekend holiday.
Technicals showed Malaysian palm oil will retest a
resistance at 2,960 ringgit per tonne as a rebound from the
Sept. 11 low of 2,874 ringgit has not completed, said Reuters
market analyst Wang Tao.
The widening discount between edible soyoil and palm oil has
helped shift demand to the cheaper tropical oil, but investors
remain cautious due to rising inventory levels in the No.2
producer.
"Everybody knows that stock is still plentiful and I won't
be surprised if September stocks go higher. That's why market is
a bit depressed although the spread between bean oil and palm
oil is more than $300 per tonne," the trader said.
Brent crude rose for the seventh straight session on Friday,
climbing towards $118 a barrel on hopes for stronger global
demand for oil and expectations that the spillover effects will
reach the commodity markets.
In other vegetable oil markets, U.S. soyoil for December
delivery climbed nearly 1 percent, buoyed by the U.S.
Federal Reserve's announcement which investors hope will improve
the demand outlook for raw materials.
The most active January 2013 soyoil contract on the
Dalian Commodity Exchange climbed 1.2 percent.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP2 0 +0.00 0 0 0
MY PALM OIL OCT2 2873 +18.00 2842 2876 779
MY PALM OIL NOV2 2936 +24.00 2905 2945 14938
CHINA PALM OLEIN JAN3 8046 +56.00 8010 8098 256058
CHINA SOYOIL JAN3 10216 +118.00 10136 10230 548468
CBOT SOY OIL DEC2 57.61 +0.60 56.79 57.80 8496
NYMEX CRUDE OCT2 100.18 +1.87 97.99 100.42 38053
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
