March 6, 2018 / 5:41 AM / 17 days ago

VEGOILS-Palm recovers in cautious trade ahead of industry price forecasts

    * Palm up after three straight sessions of declines
    * Govt production forecast for this year within expectations
    * Palm may retest support at 2,448 ringgit/tonne - Technicals

    By Liz Lee
    KUALA LUMPUR, March 6 (Reuters) - Malaysian palm oil futures rose on
Tuesday, recovering some of the ground lost in the previous three sessions, on
the back of a government production forecast that came within expectations.
    However, market sentiment was cautious ahead of price forecasts at an
industry conference in Kuala Lumpur. Leading industry analyst Dorab Mistry is
due to speak at the conference this afternoon.
    "Trading continues to be cautious ahead of price outlook to be shared at the
industry conference," said a futures trader based in Kuala Lumpur.
    The benchmark palm oil contract for May delivery on the Bursa
Malaysia Derivatives Exchange was up 0.65 percent at 2,479 ringgit ($635.64) a
tonne at the midday break. 
    It hit its lowest since Feb. 5 on Monday after top edible oils importer
India said last week that it would raise import taxes on the vegetable oil to
the highest level in more than a decade, and as the ringgit strengthened,
making the tropical oil more expensive for foreign buyers.
    Trading volumes stood at 13,884 lots of 25 tonnes each at the midday break
on Tuesday.
    "The market is still waiting for Mistry's input and the production figures
are within expectations," said another Kuala Lumpur-based trader. 
    Malaysia's minister for plantation industries and commodities, Mah Siew
Keong, said at the industry conference that the country's crude palm oil output
was seen at 20.5 million tonnes this year.
    Mah said the country would respond with "might and tact" if the European
Union proceeds with a plan to limit the use of palm oil in biodiesel.
    In other related oils, the Chicago Board of Trade's May soybean oil contract
 was up 0.3 percent, while the May soybean oil on China's Dalian
Commodity Exchange was unchanged. The Dalian May palm oil contract
 was up 0.7 percent. 
    Palm oil prices are impacted by movements in rival edible oils as they
compete for a share in the global vegetable oils market.
    Palm oil may retest a support at 2,448 ringgit per tonne, a break below
which could cause a loss to the next support at 2,418 ringgit, said Wang Tao, a
Reuters market analyst for commodities and energy technicals.
    Palm, soy and crude oil prices as of 0456 GMT
 Contract           Month  Last    Change  Low     High   Volume
 MY PALM OIL        MAR8   2480    -11.00  2480    2493   59
 MY PALM OIL        APR8   2481    +7.00   2469    2485   351
 MY PALM OIL        MAY8   2479    +16.00  2462    2483   7225
 CHINA PALM OLEIN   MAY8   5278    +36.00  5242    5286   221736
 CHINA SOYOIL       MAY8   5848    +0.00   5834    5890   222806
 CBOT SOY OIL       MAY8   32.28   +0.00   32.18   32.33  4461
 INDIA PALM OIL     MAR8   640.10  -2.00   639.20  643    385
 INDIA SOYOIL       MAR8   781     -0.90   778.1   783.7  2300
 NYMEX CRUDE        APR8   62.67   +0.10   62.58   62.88  21380
  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
  India soy oil in Indian rupee per 10 kg
  Crude in U.S. dollars per barrel
($1 = 3.9000 ringgit)
($1 = 64.9825 Indian rupees)
($1 = 6.3399 Chinese yuan)

 (Reporting by Liz Lee; Editing by Subhranshu Sahu)
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