Malaysian palm oil rises

Malaysia palm oil futures rose 0.4 percent in light trade on Wednesday on strong soy markets as China resumed buying and dry weather in the United States, although gains were limited over concerns of a looming US debt crisis.
A Republican plan to try to break a congressional deadlock over raising the US debt limit stumbled amid delays and a revolt by fiscal conservatives on Tuesday, narrowing the chances for a deal to avert a default and forcing investors to flee to safe-haven assets.
Palm oil, which has lost 17.3 percent so far this year, has been rather steady as traders look out for industry analyst Dorab Mistry presenting his price outlook in Sydney on Thursday. "Palm oil market is very quiet, but volatile trade is expected after the US Agriculture Department releases a report on July's plantings," said a trader in Kuala Lumpur, referring to a key monthly report due for release on August 11.
Tight US soybean stocks and worries about prospects for this year harvest kept a floor under prices, especially after US Department of Agriculture projected a year-on-year drop in 2011/12 soybean production and ending stocks. The benchmark October crude palm oil contract on Bursa Malaysia Derivatives rose 11 ringgit to 3,130 ringgit ($1,059.222) per tonne.
Overall traded volume fell to 18,512 lots of 25 tonnes each from the usual 25,000 lots. A Reuters technical analysis showed Malaysian palm oil is technically neutral in a range from 3,083 to 3,150 ringgit per tonne, but biased to rise further. Crude oil fell in Asian hours as partisan wrangling over the US debt limit unnerved investors and sent them fleeing from assets perceived to be dependent on growth. US soyoil for August delivery barely moved in Asian trade hours despite talks of hot weather in soybean planting regions and stronger demand from China.
A top official from USDA on Wednesday said agricultural markets are more vulnerable to supply shocks because of lower world stockpiles, while China's demand for feed grains is rapidly expanding with the growth of the middle class. China is likely to start importing more soybeans and vegetable oils from July after weak purchases in past months, said a Hamburg-based oilseeds analysts Oil World on Tuesday.
The most active May 2012 soyoil on China's Dalian Commodity Exchange rose 0.7 percent in Asian trade hours, boosted by firmer US soyoil in the previous session and expectations of growing demand. "Global demand for oils remains tight at a time when soyoil demand from China is increasing," said an oil analyst with Shanghai-based local brokerage. Warm and dry weather will further stress corn and soybean crops in the southern US Midwest, with light showers are forecast this week.