RTRS:VEGOILS-Palm oil fails to hold gains, but supply concerns support
* Investors cautious as prices hover near 2,600 rgt -trader
* Prices seen in 2,400-2,600 rgt range but could hit 2,800
-Mistry
* Palm oil to revisit Wednesday low of 2,565
ringgit-technicals
By Anuradha Raghu
KUALA LUMPUR, Nov 14 (Reuters) - Malaysian palm oil futures
were lower on Thursday as investors turned cautious about risky
bets, but uncertainty about supplies of competing edible oil
from the Philippines propped up prices.
Palm oil prices rose to near-two-week highs on Wednesday on
concerns that Typhoon Haiyan had damaged coconut crops in the
Philippines and could disrupt the supply of coconut oil from one
of the world's top producers.
By the midday break, the benchmark January contract
on the Bursa Malaysia Derivatives Exchange had edged down 0.4
percent to 2,595 ringgit ($811) per tonne, with prices moving in
a tight range between 2,589-2,617 ringgit.
Total traded volume stood at 11,361 lots of 25 tonnes each
on Thursday, lower than the average 12,500 lots.
Any shortage of Philippine coconut oil could channel demand
to palm oil-based substitutes such as palm kernel oil. The price
of crude palm kernel oil PKO-MYSTH-M1 rose to 3,802 ringgit
per tonne early on Thursday from 3,720 ringgit on Wednesday in
choppy trade.
Futures market players are avoiding risk as prices hover
near the 2,600 ringgit mark, waiting for more news on export
demand and Southeast Asian palm output.
"The 2,600 ringgit level is a critical point. Buyers and
sellers are a bit cautious -- people are unsure and are waiting
for the next bit of news before making any moves," said a trader
with a foreign commodities brokerage
"Palm kernel oil prices are choppy. Players are quite
sensitive to buying and selling because of the situation in the
Philippines," the Malaysia-based trader added.
Palm oil futures will probably trade in a range of
2,400-2,600 ringgit over the next six months, leading industry
analyst Dorab Mistry said on Thursday, but they could climb as
high as 2,800 ringgit depending on output in top producer
Indonesia and the success of its biodiesel mandate.
Mistry's forecast, given at a vegetable oil meeting in
China, reverses his earlier prediction that prices would be
stuck in a 2,200-2,400 ringgit range and could even fall to
2,000 ringgit in early January.
Reuters market analyst Wang Tao said that technicals
suggested palm oil could revisit Wednesday's low of 2,565
ringgit per tonne because a correction from the Nov. 1 high of
2,632 ringgit had not been completed.
Investors are waiting for cargo surveyor export data for the
first half of November, which will be released on Friday, to
gauge winter demand for the tropical oil.
The Malaysian government will also announce its crude palm
oil export tax for December on Friday. The No.2 producer has
kept its export duty at 4.5 percent since March.
In other markets, Brent futures held steady above $107 per
barrel on Thursday as investors balanced dovish Federal Reserve
comments with expectations of a rise in U.S. crude inventories.
In competing vegetable oil markets, the U.S. soyoil contract
for December fell 0.1 percent in early Asian trade. The
most active May soybean oil contract on the Dalian
Commodities Exchange rose 0.3 percent.
Palm, soy and crude oil prices at 0534 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 0 +0.00 0 0 0
MY PALM OIL DEC3 2586 -16.00 2581 2601 1609
MY PALM OIL JAN4 2595 -9.00 2589 2617 5873
CHINA PALM OLEIN MAY4 6290 -6.00 6282 6314 366934
CHINA SOYOIL MAY4 7236 +24.00 7224 7256 481806
CBOT SOY OIL DEC3 40.92 -0.04 40.86 41.05 2010
NYMEX CRUDE DEC3 93.96 +0.08 93.48 94.00 3866
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
