European vegoils rally on crop prospect fears

ROTTERDAM: Asking prices on the European vegetable oil market jumped on Monday with CBOT soycomplex futures on fears for smaller crops than expected as dry weather in the US Midwest is bound to cut yields, market sources said.

"The dry weather continues to dominate the market but buyers on the European cash markets were holding back believing that most products are overpriced. The absence of Asian players due to the end of Ramadan, which will keep the Malaysian palm oil futures market closed for most of the week," one broker said.

At 1630 GMT CBOT soyoil futures were between 0.06 and 1.00 cents per lb up on fears that dry weather would hurt crop prospects after closing around one cent up on Friday.

Liquid oils, soyoil rapeoil and sunoil, were offered 10 to 15 euros up following CBOT and a rally in rapeseed futures. Bids were scarce and no business was seen.

Palm oil was offered between $10 up and $30 a tonne up from Friday on the back of Chicago and a weak dollar, which supported dollar-priced products after Malaysian palm oil futures closed as much as 40 ringgit per tonne up on hopes that the FED will help growth of the global economy.

Jan/March RBD palm olein changed hands between $1,185 and $1,092.50, up $27.50 from Friday, and April/June traded $25 up at $1,085 and $1,090 a tonne cif.

Lauric oils were offered $10 to $15 a tonne up from Friday following the trend in palm oil and supported by the weak dollar. Buyers showed little interest and no deals were reported.

Copyright Reuters, 2011