VEGOILS-Palm touches near 2-week high as soybean eyed

VEGOILS-Palm touches near 2-week high as soybean eyed Tue May 29, 2012 2:42am Reposted by Tahta * U.S. weather patterns and soybean output watched * Euro zone debt issues linger but comparative oils support * India seen ending veg oil base import price freeze By Michael Taylor JAKARTA, May 29 (Reuters) - Malaysian palm oil futures climbed to a near two-week high on Tuesday, as investors cited a rebound after over-selling on the euro zone debt crisis, with expectations of dry weather conditions in soybean-growing regions in the United States also supporting prices. Asian shares edged higher but the euro eased on Tuesday, as a relief rally from last week's heavy selling proved short-lived, with a surge in Spanish borrowing costs adding to simmering worries about Europe's debt restructuring challenges. The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange traded 0.8 percent higher at 3,170 ringgit ($1,000) per tonne. Prices have slipped about 9 percent this month. Traded volumes stood at 4,799 lots of 25 tonnes each, compared with Monday's total at 14,730 lots. "It was over-sold to begin with," said a Singpaore-based analyst. "If you look at soybean prices, it has been quite resilient, so palm has been over-shooting to the downside. "If you have a world (economic) crisis, you still need people to eat ... if there is no supplier then prices will shoot up regardless." Last week, a lack of any significant breakthrough in resolving the debt crisis in Europe by policymakers, weighed on palm prices, sending the benchmark down to its lowest level this year at 2,993 ringgit per tonne. Benchmark prices peaked at 3,173 ringgit on Tuesday, the highest level since May 16. Traders now say prices will hit 3,200 before the end of May. Palm oil will end its current rebound below resistance at 3,192 ringgit per tonne, as indicated by a Fibonacci retracement analysis and a channel, said Reuters market analyst Wang Tao based on technical analysis. In related markets, corn and soybeans firmed with some weather models forecasting crop-stressing heat in the U.S. Midwest this week. In other vegetable oil markets, the most active Dalian soyoil September contract added 0.5 percent. "It was over-sold," said a Kuala Lumpur-based trader. "The fundamentals have been positive, even when we fell to 2,993. "On the technical side, we have posted a bottom, so sentiment has shifted back to positive." Traders also said there was some buying after leading palm oil buyer India, looked likely to end its freeze on the base import price of refined vegetable oils. Brent crude steadied around $107 per barrel as investors weighed potential Middle East supply disruptions against a deepening debt crisis in the euro zone. Also helping boost palm prices according to traders, is a rise in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening. Palm, soy and crude oil prices at 0613 GMT Contract Month Last Change Low High Volume M'ASIA PALM OIL JUN2 3139 +22.00 3100 3139 177 M'ASIA PALM OIL JUL2 3174 +27.00 3140 3175 340 M'ASIA PALM OIL AUG2 3170 +26.00 3135 3173 4799 M'ASIA PALM OIL SEP2 3165 +29.00 3130 3166 715 DALIAN SOY OIL JAN3 9368 +60.00 9286 9382 278900 CBOT SOY OIL JUL2 50.48 +0.36 50.05 50.50 3835 NYMEX CRUDE JUL2 91.35 +0.49 90.86 91.99 29625 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 = 3.1420 Malaysian ringgits) (Editing by Chris Gallagher)