Asian vegetable oil markets jump

Asian vegetable oil markets hit their highest in more than two years on Thursday, with palm oil hovering near a key resistance level on a weaker US dollar and supply concerns. The dollar fell to a ten-month low against a basket of currencies, fuelled by expectations of monetary easing by the US Federal Reserve and raising hopes for stronger demand for cheaper dollar-priced products like soyaoil and palm oil.
-- Malaysian palm oil just a touch below key resistance level
Malaysian palm oil futures ended half a percent lower after going as high as 2,970 ringgit ($960.8), a level not seen since August. 1 2008 and within striking distance of the key 3,000 ringgit resistance level. "Palm oil is in for the ride even though its own fundamentals are not necessarily that bullish since production could be on the rise in Malaysia," said a Malaysian trader with a foreign broker.
"However, concerns about vegetable oil supply in the United States and China are helping the market. Palm hitting 3,000 ringgit a tonne may happen this week." A Reuters analysis showed palm oil may rise to 3,000 ringgit per tonne if it stands above a pivotal resistance at 2,960 ringgit. Indications of global demand for vegetable oils can be seen when cargo surveyors unveil Malaysia's October 1-15 palm oil export data on Friday.
China is expected to buy more palm oil and soyaoil as it restocks after a slew of festivals that ended in early October. Vegetable oil contracts on China's Dalian Commodity Exchange also hit their highest in more than two years on Thursday, underpinned by the US government trimming its soy crop forecasts last week.
The most active May 2011 palm olein contract gained 1.3 percent to 8,302 yuan ($1,246) after touching its highest since July 21, 2008 of 8,362 yuan early in the day. Soyabean oil for May 2011 delivery almost one percent 9,032 yuan ($1,356) after hitting an intraday high of 9,072 - level unseen since September 1 2008.
The recent price gains may have prompted China to announce on Wednesday a sale of 300,000 tonnes of rapeseed oil from its reserves next week. The government also lifted a six-month ban on Argentine soyaoil shipments. "The government is likely to release soyaoil stocks in the near future in order to clear up some spaces for new soyaoil inventory, and to limit the price rise of edible oil," said an analyst with a Shanghai brokerage. Last year, Chinese government released 2 million tonnes of soybeans and an undisclosed amount of soyaoil to temper food prices, according to traders.