Palm snaps three-day losing streak as soy gains

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KUALA LUMPUR (Oct 14): Malaysian palm oil futures rose on Tuesday to snap a three-day losing streak, lifted by anticipation of delays in the record U.S. soybean harvest, alongside hopes that firm demand for palm would hold stockpiles in check.
    
Reports of variable yields from the U.S. Midwest grain belt and the prospect of delays to the harvesting of the 3.927 billion bushel soybean crop expected by the USDA pushed up front-month soybean prices.  
    
"Concerns over the heavy rainfall disrupting the soybean harvest led to a price surge, which is also supporting palm," said Lingam Supramaniam, director at Malaysia-based commodities firm Pelindung Bestari.
    
The benchmark contract on the Bursa Malaysia Derivatives Exchange had edged up 0.5 percent to 2,167 ringgit ($664) per tonne by Tuesday's close.
    
Total traded volume stood at 51,725 lots of 25 tonnes, much higher than the average of 35,000 lots.
    
The most active January soybean oil contract on the Dalian Commodities Exchange climbed 1.4 percent in late Asian trade, lending support to palm. The U.S. soyoil contract for December was down 0.4 percent, however, shedding some of the earlier gains.  
    
Technicals showed palm oil might have stabilised around support at 2,163 ringgit per tonne and may rise towards resistance at 2,224 ringgit, said Reuters market analyst Wang Tao.
    
Tao put support at the Oct. 13 low of 2,152 ringgit and said a break below that could trigger a fall towards 2,125 ringgit.
     
Lingam added that "exports of tax-free crude palm oil until the year-end will keep a lid on the stock build-up".
    
Malaysia, the world's No.2 producer, announced on Friday it would extend an export duty exemption on the crude grade until December.
    
Indonesia is also expected to keep its export tax at zero for a second month in November, industry sources said on Tuesday, as the top producer strives to remain competitive with rival Malaysia.
    
The tax cut could help boost demand for palm, used as cooking oil and to make foodstuff such as chocolates and ice cream, even as countries experiencing the northern winter cut back on the tropical oil, which solidifies in cold temperatures.
    
Palm oil stocks in Malaysia swelled to an 18-month high of 2.09 million tonnes at the end of September, according to data from the Malaysian Palm Oil Board.
    
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will release data on Malaysia's October 1-15 palm oil exports on Wednesday. Exports in the first ten days of the month were disappointing, falling about 18-19 percent from the same period in September.  
    
In other markets, Brent crude fell below $88 a barrel on Tuesday, returning to a nearly four-year low hit the day before, after the world's energy watchdog cut its estimates for oil demand this year and next.

  Palm, soy and crude oil prices at 1014 GMT
                                                                                                                    
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      OCT4       0    +0.00       0    2200       0
  MY PALM OIL      NOV4    2189   +15.00    2174    2198    1945
  MY PALM OIL      DEC4    2167   +10.00    2155    2185   24553
  CHINA PALM OLEIN JAN5    5264   +58.00    5184    5276  671528
  CHINA SOYOIL     JAN5    5992   +84.00    5946    6002  452840
  CBOT SOY OIL     DEC4   32.90    -1.60   32.77   33.24    7136
  INDIA PALM OIL   OCT4  445.00    -1.60  444.40  449.10     944
  INDIA SOYOIL     OCT4  589.30    +0.50  588.00  592.50    9220
  NYMEX CRUDE      NOV4   84.87    -0.87   84.64   85.60   27867
                                                                                                                    
  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
  India soy oil in Indian rupee per 10 kg
  Crude in U.S. dollars per barrel
 
(1 US dollar = 3.265 Malaysian ringgit)    
(1 US dollar = 6.1247 Chinese yuan)
(1 US dollar = 61.41 Indian rupee)