Malaysian palm oil up 2.52 percent

Malaysian crude palm oil gained 2.52 percent on Thursday after hitting two and a half month high on concern that rains may slow palm oil output and as gains in crude oil as well as soyaoil offered support. A brewing La Nina weather pattern which brings heavier-than-expected rains and comes at the heels of El Nino-driven drier weather in early 2010 may prolong weak palm oil yields despite the crop now enters high production season.
The benchmark October contract on Bursa Malaysia's Derivatives Exchange settled up 62 ringgit to 2,519 ringgit per tonne after trading as high as 2,525 ringgit, a level that was last touched on May 10. Overall volumes stood at 26,561 lots of 25 tonnes each, more than double the usual 10,000 lots. "The strength comes from outside market but there is also talk production will be below expectation because of overtly wet weather," a trader at a foreign-brokerage firm said.
Another trader said data from Malaysian Palm Oil Association showed palm oil production in July 1-20 only grew 1.5 percent from the same period last month. If prices rise above 2,500 ringgit, planters in the world's No 2 producer will have to pay a 15 percent windfall tax on every tonne of crude palm oil. Prices have been hovering around 2,500 since July 15.
Crop weather in the US Midwest remains mostly favourable for pollinating corn and developing soybean crops, with few changes from Tuesday's warm and moist outlook. August soybeans dipped 0.3 percent to $10.12 a bushel on Thursday. Other vegetable oils gained on Thursday. The most active US soyaoil for December delivery edged up 1.82 percent while the most active January soyaoil contract on China's Dalian Commodity Exchange rose 0.26 percent.
INDONESIA PALM TRADES: The Jakarta-based PT KPB Nusantara, formerly known as the state marketing centre, sold 8,000 tonnes of crude palm oil offered in an auction on Thursday with the top price at 7,565 rupiah ($0.835) per kg, compared to 7,418 rupiah per kg on previous day.
Producers in Medan, home to Indonesia's main palm oil export port of Belawan in Sumatra island, sold crude palm oil at the top price of 7,500 rupiah per kg. There was no auction in Medan on Wednesday. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used for cooking oil, at 8,000 rupiah per kg, against 7,900 rupiah per kg on previous day.