VEGOILS-Palm oil hits one-year lows on economic woes

Source: http://af.reuters.com/article/commoditiesNews/idAFL3E7L30DE20111003

* Market lowest since Oct. 2008, could rebound
    * Market looking out for last minute orders from India
    * Palm oil maintains steep price discount to soyoil

 (Adds details, comments)
    By Niluksi Koswanage
    KUALA LUMPUR, Oct 3 (Reuters) - Malaysian palm oil futures
tumbled to one-year lows on Monday on concerns that the euro
zone's deepening debt crisis will stall global economic growth
and commodity demand.
    Palm oil prices, which have lost more than a quarter so far
this year, took another hit after funds liquidated their
positions in global grains and vegetable oil markets to close up
third-quarter books.
    Traders are losing faith in officials' ability to handle the
euro zone debt crisis as government draft budget figures on
Sunday showed Greece would miss a deficit target set just months
ago in a massive bailout package.
    "The market has really gone down more than it should have
purely because of the weak economic outlooks," said a trader
with a foreign commodities brokerage in Kuala Lumpur.
    "But there should be a bounce because palm oil has been
oversold and demand is relatively strong. Funds will have to
come in again to corn and soy markets after closing their books
in last quarter, pushing up palm oil," he added.
    Benchmark December palm oil futures <0#FCPO:> on the Bursa
Malaysia Derivatives Exchange fell as much as 2.7 percent to
2,827 ringgit ($885.51) a tonne, the lowest since Oct. 8 last
year. The contract later settled at 2,845 ringgit.
    Overall traded volumes stood at 25,008 lots of 25 tonnes
each.
    Reuters analyst Wang Tao said palm oil is likely to rebound
into a range of 2,941-2,969 ringgit per tonne, as a small
five-wave cycle has been completed. [ID:nL3E7L304U]
    The protracted declines in palm oil will draw in last-minute
orders from India ahead of the Hindu festival of Diwali in late
October, as well as from China, which will need to restock after
the National Day public holidays this week.
    High palm oil demand may do little to chip away at growing
stocks in Malaysia as harvesters increase their collecting
rounds in September after the holidays for the Muslims feast,
Eid al-Fitr.
    But it keeps refined palm olein -- used in cooking oil -- at
a $90 discount to competing Argentine soyoil ,
drawing in a steady flow of orders for the tropical oil.
    U.S. soyoil for October delivery  dropped 0.2 percent
in late Asian trade, extending losses from the previous week.
The rout in oilseeds and grains emerged on Friday when the U.S.
Department of Agriculture reported larger than expected stocks
for corn.
    China's vegetable oil markets were shut for a week for the
National day holiday.
  Palm, soy and crude oil prices at 1008 GMT

  Contract        Month    Last   Change     Low    High  Volume
  M'ASIA PALM OIL  OCT1    2871   -57.00    2860    2875      42
  M'ASIA PALM OIL  NOV1    2860   -44.00    2838    2863    2638
  M'ASIA PALM OIL  DEC1    2845   -60.00    2827    2857   14895
  M'ASIA PALM OIL  JAN2    2850   -45.00    2832    2860    4946
  DALIAN SOY OIL   MAY2    9390  +290.00    9200    9402  347876
  CBOT SOY OIL     DEC1   49.90    -0.31   49.60   50.20    8234
  NYMEX CRUDE      NOV1   78.09    -1.11   77.36   78.93   31209

  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil in Chinese yuan per tonne
  Crude in U.S. dollars per barrel

($1 = 3.192 Ringgit)	

 (Editing by Miral Fahmy)