Malaysian palm oil soars

Malaysian crude palm futures jumped 4.7 percent on Tuesday to hit a one-month high as investors bet on more orders for the vegetable oil because of drought conditions in rival soyaoil-producing Argentina. Cargo surveyor Societe Generale de Surveillance reported slight declines to 372,782 tonnes for February 1-10 palm exports, suggest that Asian buyers may be slowly shifting focus to palm oil rather than soyail.
"People appear to be overbuying as the drought conditions in Argentina and China will spur on more demand for palm oil," said a trader with local commodities broker. "Also, tomorrow's January production numbers for Malaysian palm are expected to be friendly for the market." Industry regulator Malaysian Palm Oil Board will report on January palm stocks, production and exports on Wednesday. The benchmark April contract on the Bursa Malaysia Derivatives Exchange settled up 89 ringgit to 1,969 ringgit ($549.4), a level not seen since January 12.
A Reuters poll showed Malaysia's January palm oil stocks probably slid 6.1 percent to 1.87 million tonnes, a factor that supported prices. Oil hovered below $40 a barrel on Tuesday as investors speculated over what impact the approval of an $800 billion-plus stimulus package by the US government would have on the price of oil.
Much of the US soya complex traded higher in Asian hours as investors focused on droughts in Argentina, the world's third largest soya exporter and USDA crop estimates on South America. Soyaoil for March delivery edged higher while the most-active May soyaoil contract on China's Dalian exchange was up 1.2 percent.
INDONESIA PALM TRADES In Indonesia, the world's largest palm oil producer, palm oil prices surged, tracking Malaysian futures. The Jakarta-based state marketing centre said it sold the entire 6,500 tonnes of palm oil it offered in an auction at a top price of 6,958 rupiah ($0.591) per kg, up 4.5 percent from previous auction on Thursday. Producers in Medan - home to Belawan port, Indonesia's palm oil export port - sold palm oil at 6,925 rupiah per kg.
The prices also rose nearly 5 percent from the last auction on Thursday. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 7,700-7800 rupiah per kg, up from 7,300-7,400 on Monday. In Malaysian physical market, palm oil for February shipment was quoted at 1,955-1,980 ringgit per tonne in the southern region. Trades were done at 1,945 and 1,955 ringgit.