Palm oil jumps

Malaysian palm oil futures climbed to a three month high on Thursday after a surprise stock draw that prompted investors to focus on prospects of erratic weather later this year hurting production. Malaysia's government reported a 1.6 percent decline in stocks on the back of strong exports offsetting output, reinforcing concerns that supply will get tighter when monsoon season and La Nina rains curb harvesting in the last quarter.
Tighter palm oil stocks come as the US cut yield forecasts for its soy crop and could support prices of edible oils at a time when the eurozone debt crisis saps markets sentiment on concerns of slower economic growth. Soaring Italian borrowing costs stoked fears the eurozone's third biggest economy would seek rescue funds that will further compromise the block's finances and heighten the risk of break up of the economic region.
Benchmark January palm oil futures on the Bursa Malaysia Derivatives Exchange settled up 2.8 percent to 3,119 Malaysian ringgit after going as high as 3,130 ringgit - a level unseen since August 3 this year.
Traded volumes stood at 31,293 lots of 25 tonnes each, compared to the usual 25,000 lots as many investors were taking up positions ahead of the Dalian Commodity Exchange's China International Oils and Oilseed Conference over the weekend. Top industry analyst Dorab Mistry from Godrej International will present his views on the palm oil and other vegetable oil markets at this conference.
Reuters analyst Wang Tao said technicals were negative with a bearish target at 2,960 ringgit per tonne intact for palm oil as suggested by its wave pattern and a rising channel. Investors are watching weather conditions in Southeast Asia on concerns La Nina rains may further disrupt oil palm harvesting during the year-end monsoon season - a scenario that could reverse a 20 percent decline in prices this year.
Export data is pointing to declines in orders. Cargo surveyor Intertek Testing Services reported a 5.9 percent drop in Malaysian palm oil exports for the first ten days of November. US soyoil for December delivery rose 0.5 percent in Asian trade, reversing losses on erratic weather potentially harming the Brazilian soy crop and a cut in US soy crop yield forecasts. China's most active May 2012 soybean oil contract tumbled 1.9 percent.