Palm oil rises

Malaysian palm oil futures rose to a near one-month high on Tuesday, buoyed by export data and expectations of lower output, with additional support from optimism over a possible solution to the eurozone's debt problems. Uncertainty about just how close European Union leaders will come to solving the eurozone debt crisis kept many markets trading in a tight range on Tuesday.
"Pretty strong, it is holding pretty well," said a Kuala Lumpur-based palm trader. "It is because of the external crisis, with people talking about the eurozone stabilising." Benchmark January palm oil futures on the Bursa Malaysia Derivatives Exchange ended 2.1 percent higher at 2,951 Malaysian ringgit ($941) a tonne, their highest since September 26.
Traded volumes for the January palm contract stood at 14,264 lots of 25 tonnes each, compared with 12,213 lots on Monday. A slowdown in Europe, the second-largest palm consuming region after Asia, could weaken demand, although palm oil could maintain its market share in the region as it is the cheapest edible oil. "We remain bullish on the demand for edible oil in food usage in view of the rising income levels and population growth in China, India and Indonesia," CIMB analysts said in a note.
At a time when palm oil is entering a lower production cycle in the final quarter, demand appears robust. On the data front, cargo surveyors Intertek Testing Services said exports of Malaysian palm oil products for October 1-25 rose 16.4 percent, while Societe Generale de Surveillance cited a 13.5 percent climb. "Export data was OK," added the trader. "Demand is pretty firm we are going to move into the monsoon season."
In comparative markets, US soyoil for December delivery gained in Asian trade, while China's most active May 2012 soybean oil contract also inched higher. Brent was steady above $111 on Tuesday as looming concern over Europe's economic health kept prices in check, while US oil rose for a third straight day, boosted by improved company earnings. Reuters technical analyst Wang Tao said palm prices would break a resistance at 2,941 ringgit per tonne and head towards 3,014 ringgit.