Palm oil jumps

Malaysian crude palm oil futures rose to its highest in nearly two weeks on Wednesday on expectations of rising demand, firmer comparative oils and an improving eurozone debt outlook. Benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange touched a high at 3,072 Malaysian ringgit per tonne, a level last seen on December 9.
"The market is moving to the year-end slightly firmer," said a Kuala Lumpur-based trader. "Monday is a holiday next week, so a lot of people are closing positions." Malaysian financials markets will close on Monday for Christmas. Traded volumes for the March palm contract were at 13,242 lots of 25 tonnes each, compared with 9,098 lots on Tuesday.
Palm oil is on course for a 19 percent fall this year, however, weighed down in part by doubts surrounding the eurozone debt crisis and global economic uncertainty. "Prices will be around 3,100 ringgit," said a Jakarta-based analyst when asked about prices towards the year-end. "There will be speculation trades on next year, with strong demand ahead of next year ahead of the Chinese new year."
Data from the previous session showed that exports from Malaysia are falling as top buyers slow orders before the year end, giving some breathing space to palm oil stocks that have started to tighten a little. Palm oil traders also kept an eye out for weather developments in South America curbing the soy crop that is crushed into competing soyoil.
US corn fell, snapping three sessions of gains, while soybeans were little changed near a 4-week top on forecasts of rain in parts of Brazil and Argentina that had been hit by dry weather. US soyoil for January delivery inched higher in Asian trade, while the most active September 2012 soyoil contract on China's Dalian commodity exchange also gained.
"There is no clear direction in the soybean market right now but it may be preparing for a strong rebound in the new year," said Zhan Zhi Hong, an oil analyst with Shenzhen-based China Merchants Futures.
"Fundamentally, the weather conditions in South America will not affect the market for too long." The monsoon season in top Southeast Asian palm oil producing countries has offered some support in recent weeks, with expectations of lower output. "There is talk that production in December may decline by about 20 percent, coupled with a positive external market leading the rebound," said a second Kuala Lumpur-based trader. In other oil markets, Brent crude futures rose above $107, gaining for a third straight day, after upbeat US data pointed to a recovery in demand growth in the world's biggest oil consumer amid fears of a disruption in supplies.