Malaysian palm oil climbs

Malaysian crude palm oil futures climbed to a two-week high on Wednesday as traders bet on strong demand in the next few weeks as top vegetable oil buyers India and China restock. Palm oil may also get a boost as harsh wet weather is likely to affect soybean seeding in the US and dry weather in Europe could cut the rapeseed crop.
Both soy and rapeseed are crushed into oils that directly compete with palm oil for use in the food and fuel sector. Any jump in the prices of these vegetable oils could lift palm oil, which has fallen nearly 13 percent so far this year. "Palm oil is not about to go down anytime soon. Demand in Asia is picking up and the crop scares in the United States and Europe will support prices," said a trader with a foreign commodities broker in the Malaysian capital. The benchmark August crude palm oil contract on the Bursa Malaysia Derivatives Exchange closed 1.3 percent higher at 3,297 ringgit($1,083.648)a tonne after rising as high as 3,305 ringgit in the previous session - a level unseen since May 3.
Overall traded volume stood at 29,486 lots of 25 tonnes each compared to the usual 25,000 lots, after a public holiday on Tuesday in Malaysia. Reuters technical analysis showed the Malaysian palm oil benchmark turned neutral as it has returned into a range of 3,215-3,282 ringgit per tonne.
Malaysian palm oil exports jumped by nearly a third in the first half of May, cargo surveyors reported on Monday, and traders expect more orders to come in from China and India as production recovers in Southeast Asia. Ruchi Soya Industries, India's top cooking oil importer, said the country's edible oil purchases could fall 9 percent in the year to October due to higher domestic oilseed output.
"India will get a good crop but the middle class is expanding rapidly and cooking oil consumption is still at a lower base," said another trader in Malaysia. US crude oil bounced back on Wednesday, supporting other vegetable oil markets. Chicago soyoil for July delivery rose 0.8 percent in Asian hours as concerns mount that wet weather in the US Midwest will also affect seeding soybeans, although gains were limited by large South American soy crops. China's most-active January 2012 Dalian soyoil contract rose 1.2 percent.