SINGAPORE: Malaysian palm oil futures extended gains to a one-year high on Monday as strong exports data and drought woes in soy-producing South Americaboosted investor sentiment.
Agriculture markets, including palm oil, are set to face choppy trade ahead of theUSprospective plantings report due on Friday, which will gauge output of soybeans that is usually crushed into competing soybean oil.
Palm oil has gained 8.9 percent since the start of 2012 on Asian demand chasing sluggish production, limited soyoil supplies flowing from South America although now any prospect of higher US soy harvests may rein in gains.
The market got a further boost after leading industry analyst Thomas Mielke said later in the day that soy prices would hit above $14 a bushel in the next four to eight weeks as the severe drought hits the crops in Brazil and Argentina.
"Export is still very firm, crude oil price is still high and bean and corn are fighting over acreage,"said a trader with a foreign commodities brokerage.
"With all these factors going on, and a sudden surge of chinese demand expected, the market's very supportive. The uptrend is still on, and a strong resistance will be at 3,500 ringgit," the trader added.
Bbenchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange settled up 1.0 percent at 3,459 ringgit ($1,123) per tonne after going as high as 3,479 ringgit, a level unseen since last March.
Traded volumes stood at 23,949 lots of 25 tonnes each, slightly lower than the usual 25,000 lots.
Malaysian exports rose 7.7 percent for the first 25 days of March from a month ago, according to cargo surveyor Intertek Testing Services, continuing a strong export trend seen in the month.
Another cargo surveyor Societe Generale de Surveillance reported a 6.6 percent increase in exports for the same period.
Traders are keeping an eye on the US Department of Agriculture planting forecasts due at the end of the month to gauge soybean output for the year.
A Reuters survey of 25 market watchers said soybean acreage could rise this year as a futures market rally over the winter boosted enthusiasm for the crop.
Market players will also be eyeing comments from leading analyst Dorab Mistry, who will be presenting his outlook on edible oils this year at the China Oils and Oilseed Conference in Beijing on Tuesday after Mielke's presentation on Monday.
Oil prices traded under $125 per barrel on Monday, pausing for breath after a rally of around 1.5 percent the previous session, and as renewed worries about the financial stability of the eurozone returned to the fore.
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