Malaysian palm oil ended off a 26-month high and other vegetable oil markets edged higher as traders bet China would start to restock after the long holidays at a time of possible tight global supplies. But some traders turned cautious later in the session after news that India would probably cut down on some vegetable oil imports as rapeseed output jumped in a key producing state.
Benchmark Malaysian palm oil futures rose as much as 0.8 percent at 2,808 ringgit ($909) per tonne, a level unseen since August 8, 2008. The contract ended 26 ringgit lower at 2,760 ringgit. Trades were brisk, with 14,443 lots of 25 tonnes each changing hands, up from the usual 10,000. "India possibly lowering imports after a bumper rapeseed harvest is adding to the selling pressure. We might see a mild correction. Malaysian export data is now crucial at this juncture," said a Malaysian trader.
India and China's import trends for October will emerge when cargo surveyors issue Malaysia's October 1-10 palm oil export data on Monday. Industry regulator Malaysian Palm Oil Board will unveil September palm oil stocks data on the same day.
Vegetable oils got some support from Ukraine's announcement it would curb grains exports until the end of 2010, lower soy production forecasts in Brazil and estimates of lacklustre Malaysian palm oil output. Soaring demand for vegetable oils used in food and biofuel will send Chicago soyaoil prices to highs not seen since 2008, a renowned oilseed analyst said. The comments lifted US soyaoil for October delivery by 0.9 percent in late Asian trade.
China's palm olein contract ended higher after going as high as 2.1 percent on Friday as the market reopened after a week-long National Day holiday and traders played catch-up with other markets, driven recently by the weaker US dollar. Bets against the US dollar have grown on expectations that the US Federal Reserve will follow in the footsteps of the Bank of Japan and get aggressive about loosening monetary policy to boost its economy. Reflecting the uncertainty, China's most active May 2011 soyaoil contract fell 0.2 percent as traders expect the country to release more soyaoil from its state reserves to make way for the incoming soy harvest.
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