SINGAPORE: Malaysian palm oil futures inched up on Monday, riding on rival soybean oil's gains after US soy crushing data sent soybeans to a six-week peak.
Chicago soybeans hit their highest since Nov. 8 after data from the National Oilseed Processors Association showed US soybean processors crushed the most soybeans in almost three years and on higher demand especially from top buyer China.
Soybean oil rose in tandem, supporting palm oil, a competing vegetable oil used to make products ranging from food to biofuels.
Gains were limited, however, as concerns over high stockpiles remained, especially as the latest data pointed to signs of slowing exports, although traders said easing production could help bring down stock levels.
"The market is up a bit on the back of Dalian and Chicago soybean oil," said a trader with a foreign commodities brokerage in Malaysia. "Malaysian palm production should come down this month, so inventory should probably go down a bit."
By the midday break, the benchmark March contract on the Bursa Malaysia Derivatives Exchange had gained 0.4 percent to 2,355 ringgit ($771) per tonne.
Total traded volumes stood at 13,501 lots of 25 tonnes each, higher than the usual 12,500 lots.
Exports of Malaysian palm oil products for Dec. 1-15 fell 6.4 percent to 719,817 tonnes from 769,087 tonnes for the Nov. 1-15 period, cargo surveyor Intertek Testing Services said on Saturday.
Another cargo surveyor Societe Generale de Surveillance will issue data for the same period later on Monday.
Traders are waiting for Malaysia's new January crude palm oil export tax, which could be announced either on Monday or Tuesday, according to a government source who declined to be identified as he is not authorised to speak to the media.
The tariff, likely to be set at zero, could boost export demand for the crude grade and help lower inventory levels in the world's No.2 largest palm producer.
In related markets, Brent crude held steady above $108 a barrel on Monday, drawing support from a brighter economic outlook for top energy consumer China, although investors remained skittish as US talks to avert a year-end "fiscal cliff" dragged on.
In other vegetable oil markets, US soyoil for January delivery had edged down 0.1 percent by 0545 GMT after earlier gains. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange was up 1.2 percent.
Center>Copyright Reuters, 2012
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