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VEGOILS-Palm oil rebounds from 5-wk low; Europe woes caps gains
July 25, 2012 / 5:20 AM / 5 years ago

VEGOILS-Palm oil rebounds from 5-wk low; Europe woes caps gains

 * Palm recovers on bargain hunting from 5-wk low
 * Malaysian palm exports for July 1-25 down 14 pct -ITS
 * Palm oil to end rebound below 2,970 ringgit -technicals

 (Updates prices, adds SGS export data)
 By Chew Yee Kiat
 SINGAPORE, July 25 (Reuters) - Malaysian crude palm oil
rebounded on Wednesday on bargain hunting after prices hit a
five-week low earlier in the session, although gains were modest
as investors remained worried that the euro zone debt crisis
could hurt demand.
 The euro zone's private sector shrank for a sixth month in
July as manufacturing output nosedived, notably in Germany and
France, adding to the likelihood that the bloc will slump back
into recession, business surveys showed on Tuesday. 
 Market players also priced in weaker Malaysian exports for
the July 1-25 period after cargo surveyor Intertek Testing
Services reported a 14 percent monthly drop. 
 "The market recovered today as it was a little bit oversold.
Exports were down 14 percent but that has already been factored
in considering the market dropped close to 200 ringgit in the
last few days," said a trader with a foreign commodities
brokerage in Malaysia.     
 The benchmark October palm oil futures on the Bursa
Malaysia Derivatives Exchange edged up 0.9 percent to close at
2,951 ringgit ($930) per tonne. Prices earlier dropped to 2,898
ringgit, the lowest since June 18. 
 Traded volume stood at 45,813 lots of 25 tonnes each, higher
than the usual 25,000 lots.    
 On the technicals front, palm oil is expected to end its
current rebound below a resistance at 2,970 ringgit, said
Reuters market analyst Wang Tao. 
 Palm oil futures were trading almost 3 percent lower so far
this week on renewed concerns over the euro zone debt crisis and
wet weather forecast in the U.S. Midwest, where crops are
withering due to the worst drought in decades.
 Weather updates on Monday forecast some rains for soybean
crops in the U.S. Midwest this week, helping to offset a weekly
crop condition report from the U.S. Department of Agriculture
that downgraded soy crop ratings. 
 A higher supply of soybeans to be crushed into vegetable oil
could narrow spreads between soybean oil and palm oil and draw
demand away from the tropical oil. 
 In Malaysia, exports continued to show weakness from a month
ago. In addition to the Intertek Testing Services data, cargo
surveyor Societe Generale de Surveillance reported a steeper
18.6 percent monthly decline in exports for the July 1-25
 The market is also looking out for El Nino, which could
return to Southeast Asia in late 2012, as the hot and dry
weather could hurt palm oil output from top producers Indonesia
and Malaysia.     
 Brent crude oil gained slightly on Wednesday, as concerns
about threats to oil supply from the Middle East offset worries
about oil demand from the euro zone. 
 In other vegetable oil markets, the most active U.S. soyoil
contract for December delivery was up 1.1 percent by 1005
GMT. The most active January 2013 soyoil contract on the
Dalian Commodity Exchange closed 0.8 percent lower.     
  Palm, soy and crude oil prices at 1006 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      AUG2    2931   +33.00    2899    2931     455
  MY PALM OIL      SEP2    2940   +28.00    2889    2945    5050
  MY PALM OIL      OCT2    2951   +25.00    2898    2955   25376
  CHINA PALM OLEIN JAN3    7652   -50.00    7604    7742  245320
  CHINA SOYOIL     JAN3    9336   -72.00    9264    9408  557780
  CBOT SOY OIL     DEC2   52.91    +0.58   52.08   52.97   14011
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
($1=3.172 Malaysian ringgit)

 (Editing by Miral Fahmy)

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