RTRS - India may raise palm oil import duties again this yr -analyst

KUALA LUMPUR, Jan 30 (Reuters) - India may raise import duties on edible oils such as palm oil and soyoil again this year, with the government looking to protect domestic oilseed farmers as inflation slows, leading industry analyst Dorab Mistry said.

India, the world's No.1 edible oil buyer, this month hiked import duties on crude imports to 2.5 percent from zero and lifted a six year freeze on the taxable value of cargoes to curb cheap imports from top palm suppliers Indonesia and Malaysia.

While India left refined edible oil import duties unchanged, the policy move on crude showed it was still wary on inflation that slowed last month to its lowest in three years, said Mistry, who closely tracks the country's oilseed sector.

"I expect the next step to be announced in the budget at the end of February," Mistry, head of trading with India's leading speciality chemicals group, Godrej Industries, told Reuters in an interview on Wednesday.

"The industry has requested import duty at 10 percent on unrefined oils and 17.5 percent on refined oils and I believe we shall get that level by end of March 2013 at the latest," he said.

New Delhi raising import taxes counters Malaysia's move to lower its crude export duty to reduce record palm oil stocks and helps to raise India's falling domestic oilseed price.

As a rule of thumb, India's soybean and rapeseed farmers need a minimum price of 35,000-38,000 rupees ($650-$710) a tonne to continue planting these crops, Mistry said. Current prices for soybeans are hovering at 32,400 rupees a tonne, according to industry data.

This spurs farmers to switch to other more lucrative crops such as corn, pulses and vegetables, setting the stage for India's government to raise import duties on crude oils to 20 percent and refined oils to 27.5 percent by August, Mistry added.

"Remember from August we shall have a torrent of sunflower oil available for export from Russia and Ukraine, and this oil will go to a discount to soya oil and will pressure prices all over the vegetable oil complex."

VERY HIGH PALM OIL STOCKS

India imports about half the 16 million to 17 million tonnes of edible oils it consumes every year, mostly palm oil from Indonesia and Malaysia.

Mistry said that any further policy move by India would impact these two Southeast Asian countries where palm oil prices were very high at 2,400-2,500 ringgit ($790-$820) even though Malaysian stocks hit a record 2.6 million tonnes in December.

Mistry said these prices may not prompt much expansion in demand for the edible oil as palm oil output grows and competing soyoil supply jumps from May onwards.

"I do not expect Malaysian stocks to decline below 2 million tonnes in the foreseeable future," he said.

Malaysia's January palm oil stocks will be almost unchanged from December, with declines expected in February to April. By May, stocks will build again, Mistry said.

Indonesia, which does not publish stocks figures, has current inventories of about 5 million tonnes.

"Of these about 1 tonne is systemic stocks which are permanently required in view of the extended and poor logistics in Indonesia," Mistry said.

RTRS - China to raise soybean, soyoil and palm imports - Oil World

HAMBURG, Jan 29 (Reuters) - China is set to increase its soybean, soyoil and palm oil imports in the current 2012/13 season to meet demand created by the country’s continued economic growth, Hamburg-based oilseeds analyst Oil World said on Tuesday.

Soybean prices hit record highs in September 2012 after drought ravaged the U.S. crop, compounding supply shortages after poor Argentine and Brazilian harvests. However, huge South American crops are expected in early 2013, which may relieve pressure on world supplies created by China's rising appetite.

China's soybean imports in October 2012 to September 2013 will rise to 62 million tonnes from 59.2 in 2011/12 and only 50.3 million tonnes in 2009/10, Oil World forecast.

Soyoil imports in 2012/13 will rise to 1.55 million tonnes from 1.50 million tonnes in 2011/12, while 2012/13 palm oil imports will jump to 6.65 million tonnes from 5.95 million tonnes in 2011/12, it said.

However, the analyst added that China may have trouble buying all the soybeans it wants until the new harvests from South America become more widely available in the second quarter of 2013.

“Soybean imports may decline by 2 million tonnes to 12 million tonnes January to March 2013, as very little will be available from South America in this period,” it said.

“But for April to September 2013 we forecast a rise in Chinese imports to 35.9 million tonnes, versus 31 million tonnes, which must be covered largely by South American soybeans as U.S. export supplies will be depleted by then.”

Palm oil is expected to cover the bulk of edible oil import requirements, assuming that exporters are able to meet the stricter Chinese quality standards that took force on Jan. 1, Oil World said.

Imports of palm oil were boosted to a “spectacular” 960,000 tonnes in December 2012 from 669,000 tonnes in December 2011 as importers built up stocks ahead of the new quality regulations, it said.

Traders said on Jan. 24 that Chinese authorities have ruled that Malaysian palm oil shipments were reaching the new quality standards.

RTRS - South American soybean crop delay would raise prices-Oil World

HAMBURG, Jan 29 (Reuters) - Soybean harvest delays or transport problems in South America may shift business back to the United States in the next one to three months, pushing up U.S. soybean futures, Hamburg-based oilseeds analysts Oil World said.

The global soybean market is counting on huge South American crops in early 2013 to relieve tight world supplies after a drought in the United States in 2012, and there is intense concern about any delays or weather damage to harvests in Brazil and Argentina.

“If insufficient South American exports in February and March shift back some business to U.S. origin, it could have an explosive impact on U.S. soybean futures in the May contract,” Oil World said on Tuesday.

“Although the South American crops are record high - at least on paper - it is questionable whether sufficient quantities can be physically moved in time, considering the insufficient facilities for inland transportation and at the ports,” Oil World said.

Brazil is forecast to overtake the United States as the number one exporter and producer of soybeans this season, with a 30 percent increase in its soybean crop, but the country has added no new capacity to its ports.

“The current harvest delays in Brazil are further complicating the situation,” the firm said.

Brazilian farmers have already started harvesting this year’s soybean crop, which is set to reach a record 85 million tonnes.

But rain has delayed some early Brazilian harvesting, and export supplies arriving at Brazilian ports are smaller than expected, leading to an increasing number of ships waiting to load, Oil World said.

Argentine farmers have sold only an estimated 10 percent of their expected 2013 crop so far, less than half of they sold in early 2012, because of fears about exchange rate movements, it said.

“The transition from U.S. to South American (export) supplies could turn out more difficult than expected,” Oil World said.

Oil World warned on Monday that U.S. soybean supplies will be tight in early 2013 after its poor crop and large export sales.

Trader's highlight

DJI - NEW YORK, Jan 29 (Reuters) - Stock markets around the world rose and the dollar fell to a 14-month low against the euro on Tuesday amid rising risk appetite as the Federal Reserve began a two-day policy meeting in which it is expected to maintain its easy monetary policy.

A report that showed U.S. single-family home prices rose in November, building on a string of gains that point to a housing market that is on the mend, added to investor optimism on economic growth.

Still, investors were cautious about making big bets, given mixed U.S. economic data, the run-up in stocks in recent weeks and risk in the form of a slew of economic reports for the rest of the week, as well as the Fed meeting.

Markets were initially weaker on a report showing U.S. consumer confidence dropped in January to its lowest in more than a year. But that same data kept alive expectations the Fed will maintain its ultra-easy monetary policy for the foreseeable future.

"There is a serious split between the attitudes of consumers and the attitudes of the markets," said Joseph Trevisani, chief market strategist at WorldWideMarkets, in Woodcliff Lake, New Jersey, after the consumer confidence data. "This may make for a weaker dollar as it makes it less likely the Fed will contemplate an early removal of QE," referring to the central bank's debt-buying program called quantitative easing.

The euro extended gains versus the dollar, breaking above key resistance to hit a 14-month high It last traded at $1.3491.

STOCKS GAIN

The Dow Jones industrial average gained 72.49 points, or 0.52 percent, at 13,954.42. The Standard & Poor's 500 Index was up 7.66 points, or 0.51 percent, at 1,507.84. The Nasdaq Composite Index was down 0.64 points, or 0.02 percent, at 3,153.66.

"A move like this in one month is extraordinary, and keeping the gains going will depend on concrete news like earnings and data that show the economy is getting better," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "We haven't seen enough of that to make people jump in after the rally we've had."

European stocks scaled two-year highs, boosted by miners, as optimism about economic recovery gained momentum following the encouraging U.S. home price data and comments on growth in top metals consumer China.

U.S. DEBT

In the U.S. Treasury debt market, benchmark 10-year yields proved unable to hold above the key 2 percent level touched on Monday, with investors looking ahead to a debt auction later in the day, as well as the Fed meeting.

The benchmark 10-year U.S. Treasury note was down 9/32, the yield at 1.9955 percent.

Debt prices had earlier reversed losses to advance after the U.S. consumer confidence data.

Investors now await the outcome of the Fed meeting on Wednesday. The Fed is not expected to change its stance after deciding only in December to loosen conditions further. However, investors are watching to see if changes in the membership of the policy-setting committee for 2013 could signal a shift in the future.

Gold snapped a four-day losing streak to rise 0.5 percent to around $1,662.60 an ounce, but any hint that the Fed is considering an end to its loose monetary policy would probably send the precious metal down.

NYMEX - NEW YORK, Jan 29 (Reuters) - U.S. crude futures rose more than 1 percent on Tuesday, after strong U.S. housing market data bolstered confidence that economic growth and fuel demand were accelerating.

CBOT Soybean -  Soybean futures on the Chicago Board of Trade ended higher on Tuesday on uncertainty about prospects for much-needed rains in crop areas of Argentina, traders said.

·         The market pared gains after the midday run of the main U.S. weather forecasting model added more rain to Argentina's crop belt, but some private forecasters were skeptical of the update, and values firmed by the close.

·         Soybean harvest delays or transport problems in South America may shift business back to the United States in the next one to three months, pushing up U.S. soybean futures, analysts Oil World said.

·         China is set to increase its soybean, soyoil and palm oil imports in the current 2012/13 season to meet demand created by the country’s continued economic growth, Hamburg-based oilseeds analyst Oil World said.

·         China's soybean imports between April and June are likely to reach 15 million tonnes, up from an estimated 11 million tonnes in the first quarter, according to government think tank the China National Grain and Oils Information Centre.

·         Brazilian analysts Safras e Mercado raised its estimate of Brazil's 2012/2013 soybean crop to 84.69 million tonnes, up 25 percent from last year's crop and up slightly from its previous outlook of 84.31 million tonnes in December.

·         Malaysian palm oil futures rose on expectation some buyers may switch after Indonesia announced a higher crude palm oil export tax, although gains were limited by persistent concerns over record stocks.

FCPO - SINGAPORE, Jan 29 (Reuters) - Malaysian palm oil futures gained on Tuesday on expectation some buyers may switch after Indonesia announced a higher crude palm oil export tax, although gains were limited by persisting concerns over record stocks.

Indonesia, the world's top palm oil producer, will increase its export tax for crude palm oil to 9 percent for February from 7.5 percent in the previous month, while Malaysia's crude palm oil export tax will remain at zero percent for February.

"The market is a bit uncertain now, the focus is on stocks and exports. That's why we see some range-trading today," said a trader with a foreign commodities brokerage in Malaysia. "But the higher Indonesia tax could be a reason why the market is a bit positive."

By market close, the benchmark April contract n the Bursa Malaysia Derivatives Exchange had climbed 1.3 percent to 2,476 ringgit ($805) per tonne. The market traded in a range of 2,446-2,484 ringgit after resuming trading from a Monday holiday.

Total traded volumes stood at 30,506 lots of 25 tonnes each, higher than the usual 25,000 lots.

Market players will be looking out for Malaysia's January palm exports data due Thursday for further trading cues.

Shipments for the first 25 days of the month suffered a double-digit decline on lower Chinese and European demand, raising worries that stocks could still climb higher in January after hitting a record 2.63 million tonnes last month.

Palm oil exports from Indonesia fell 4 percent to 1.9 million tonnes in December from the previous month, industry data showed on Tuesday.

Brent crude stayed above $113 on Tuesday on hopes that economic growth might be picking up in the world's largest oil consumer after a gauge of planned U.S. business spending rose in December, adding to recent positive global economic data. 

Jan 29 (Reuters) - Most Southeast Asian stock markets gained on Tuesday, with the Philippines hitting a record high and the region enjoyed foreign inflows ahead of more U.S. economic data and a Federal Reserve policy decision later in the week that may offer clues to the Fed's stimulus plans.

Philippine Composite Index ended 0.7 percent firmer at a record closing high of 6,234.73 points, after hitting a fresh intraday peak of 6,254.04.

Thai SET index rose 0.5 percent to 1,478.77, its highest close since November 1994.

Manila saw a net foreign inflow of $31.9 million, Jakarta received a net foreign buying of $20.4 million, and Kuala Lumpur witnessed an inflow of $49.46 million.

Indonesia gained 0.5 percent and ended at 4439.03 and Vietnam ended 0.9 percent higher at 484.01, a near nine-month high. Malaysia ended steady.

Trader's highlight

DJI - NEW YORK, Jan 28 (Reuters) - The S&P 500 eased slightly on Monday after an eight-day run of gains, while the Nasdaq edged higher as Apple shares rebounded.

The index remained above 1,500, however, after closing above that level on Friday for the first time in more than five years. The S&P 500's eight sessions of gains was its longest winning streak in eight years.

Caterpillar shares helped limit losses on the Dow industrials even as the company posted a 55 percent drop in quarterly profit due to a charge connected with accounting fraud at a Chinese subsidiary and weak demand among its dealers. Caterpillar's shares, down 2.2 percent in the past three sessions, rose 2 percent Monday to $97.45.

"I think this multi-year high is really something that's in play both for shorter-term traders and with folks with money on the sidelines," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

The Dow Jones industrial average was down 14.05 points, or 0.10 percent, at 13,881.93. The Standard & Poor's 500 Index was down 2.78 points, or 0.18 percent, at 1,500.18. The Nasdaq Composite Index was up 4.59 points, or 0.15 percent, at 3,154.30.

Investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record, research provider TrimTabs Investment Research said.

"What we have seen this year is, it appears the individual investor is allocating some 401(k) money to equities. Hopefully that's a decision that will be with us for a while," Hellwig said.

Data on Monday pointed to growing economic momentum as companies sensed improved consumer demand.

U.S. durable goods orders jumped 4.6 percent in December, a pace that far outstripped expectations for a rise of 1.8 percent. Pending home sales, however, unexpectedly dropped 4.3 percent. Analysts were looking for an increase of 0.3 percent.

Corporate earnings so far have mostly been stronger than expected. Thomson Reuters data showed that of the 150 companies in the S&P 500 that have reported earnings so far, 67.3 percent have beaten analysts' expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

NYMEX - NEW YORK, Jan 28 (Reuters) - U.S. crude futures rose on Monday in choppy trading, lifted by supportive durable goods data and by strong gasoline futures, which gained 2 percent in reaction to Hess Corp's plans to shut a refinery in the Northeast.

CBOT Soybean - Jan 28 (Reuters) - Soybean futures on the Chicago Board of Trade rose for a second straight session on Monday, lifted by uncertainty about the likelihood of much-needed rains in Argentina, traders said.

• Soymeal followed soybeans higher while soyoil fell.

• Soybeans and corn in Argentina will endure stress from dryness in the next three days before rain is expected to fall, said Drew Lerner, president of World Weather Inc. Crop conditions will worsen if the weather stays dry in February, he added

• USDA said private exporters reported sales of 220,000 tonnes of U.S. soybeans to China for delivery in 2013/14.

• Brazil's soybean harvest was 3 percent complete as of last week, with the top two producing states of Mato Grosso and Parana at 6 percent and 5 percent respectively, analysts at Celeres said.

• Large speculators expanded their net long position in CBOT soybeans by 42 percent in the latest week, the biggest bump to their net long stake in 11-1/2 months, the supplement to CFTC's weekly commitments report showed Friday.

• The average price forecast for Chicago Board of Trade soybean futures at the end of 2013, among 13 analysts surveyed by Reuters, was $11.83 per bushel, a drop of 17 percent from $14.19 at the end of 2012.

FCPO - SINGAPORE, Jan 25 (Reuters) - Malaysian palm oil futures fell on Friday, snapping four straight sessions of gains, as weak exports and a move by India to raise its base import price of crude palm oil prompted traders to book profits.

Exports of Malaysian palm oil products for Jan. 1-25 fell 14 percent to 1,102,585 tonnes from 1,283,704 tonnes in the Dec. 1-25 period, cargo surveyor Intertek Testing Services said on Friday.

Another cargo surveyor Societe Generale de Surveillance reported a 14.6 percent decline in shipments to 1,104,890 tonnes for the same period.

India's move to raise the base import price of crude palm oil by nearly 80 percent also stoked concerns it could neutralise export duty cuts by major producers Indonesia and Malaysia, although analysts said that its effect may be more pronounced in the long run.

"We are neutral on the news, as the crude palm oil price should have priced this in previously. However, in the long run the new rule may prompt Indian refineries to use local crude palm oil first before importing from Malaysia and Indonesia," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank.

"Our major concern is still on Malaysia's inventory, which we think will reach another record high of 2.66 million tonnes by end-January. This should limit price upside."

For the week, palm oil still posted a gain of 1.9 percent, on concerns that dry weather in South America could hurt soybean and soybean oil production, shifting some demand to the cheaper palm oil.

Despite seasonally lower production, market participants still fear that Malaysian palm oil stocks that hit a record 2.63 million tonnes in December could climb higher this month due to weak exports.

Shipments to major consumer China fell amid high port stocks and as the stricter quality rule on edible oil imports prompted some exporters to hold back shipments. European demand also plunged more than 50 percent on seasonal factors.

RTRS - Global importers to buy more cheap palm oil in 2013- Oil World

HAMBURG, Jan 22 (Reuters) - Global edible oil importers are likely to increase purchases of low-priced palm oil in coming months, turning away from soyoil and other more expensive seed-based oils, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“Palm oil has clearly improved its price-competitiveness for food as well as for non-food applications,” Oil World said. “This is good news for consumers worldwide who will become increasingly dependent on palm oil in the months ahead as a result of insufficient supplies of seed oils."

Malaysian refined, bleached and deodorised (RBD) palm oil is currently around $300 a tonne cheaper than Argentine fob soyoil export prices, Oil World said.

“We expect sizable increases in palm oil imports and consumption in India, China, the European Union and several other countries,” it said.

Ample global stocks have been weakening palm oil prices since September, Oil World said.

Global soyoil production is likely to stagnate at the year-ago level in Jan./Mar. 2013 as processing of South America’s new soybean crop is likely to start only gradually, it said.

RTRS - Oil World cuts Argentine 2013 soybean crop forecast, ups Brazil

HAMBURG, Jan 22 (Reuters) - Oilseeds analyst Oil World said it has cut its forecasts for the 2013 soybean harvest in Argentina by 1 million tonnes because of unfavourably dry weather but has raised its forecast of Brazil's crop by 0.5 million tonnes.

Oil World now forecasts Argentina will harvest 52.0 million tonnes of soybeans in early 2013, down from 53 million tonnes it forecast in December and 56 million tonnes in October but still up from 39.9 million tonnes Argentina harvested in early 2012.

Hamburg-based Oil World said on Tuesday it has raised its forecast of Brazil’s 2013 crop to 81.5 million tonnes from 81.0 million tonnes forecast in December and up from 66.8 million tonnes Brazil harvested in early 2012 because of more positive weather in the country.

Big South American harvests are needed in early 2013 to relieve the tight global soybean market, where the U.S. is carrying the major burden of meeting global export demand.

Soybean prices hit record highs in September 2012 as drought ravaged the U.S. crop after poor Argentine and Brazilian harvests. Prices later fell back as the U.S. harvest turned out better than feared and big South American crops in early 2013 may relieve world supplies.

Oil World’s forecast is more pessimistic than official estimates of the crop in Argentina, the world’s third largest soybean exporter after the United States and Brazil. The U.S. Department of Agriculture on Jan. 11 forecast Argentina’s 2013 soybean crop at 54.0 million tonnes. Argentina’s government expects at least a 55 million tonne crop. 

Argentina had hot and dry weather in the second half of December and early January with some soybean regions receiving only 10-20 percent of normal rain volumes, Oil World said.

“If the dryness continues until early February, soybeans and other summer crops will be stressed and the yield potential reduced,” it said.

Brazil’s weather has been more favourable and Oil World had said on Jan. 15 the country’s soybean crop could exceed 81 million tonnes. 

Chicago March soybeans rose nearly 4 percent last week, partly because of concern about Argentina’s crop. 

“The weather conditions in Argentina in coming weeks will determine whether the current risk premium on prices must be raised further or whether we will experience seasonal supply and price pressure with fund liquidation,” Oil World said.

Trader's highlight

NEW YORK, Jan 22 (Reuters) - The yen rose against the dollar and euro on Tuesday after the Bank of Japan said its open-ended commitment to buy assets would kick in only next year, but the prospect of more monetary accommodation by a central bank appeared to lend support to a broad range of financial assets, including stocks, gold and oil.

Analysts said the yen's rise would likely be short-lived and that on a medium-term basis, it would weaken.

The euro benefited from a surprisingly sharp jump in investor sentiment in Germany. Analysts said, however, that the currency's recent climb could put the euro zone at a competitive disadvantage when its economy needs to grow.

Hopes that the global economy would improve allowed cyclical sectors to lead the Standard & Poor's 500 to a five-year high.

Investors waited for earnings results from technology companies due after the closing bell and were not disappointed.

A catalyst from positive earnings results is needed for stocks to move still higher, he said, while mixed earnings with "lower guidance" would make another upward move more difficult.

Signals that Republican leaders in the U.S. House of Representatives would pass a nearly four-month extension of the U.S. debt limit were also helpful for riskier assets.

Global stock markets were mixed. Japanese equities and world indices rose on the BoJ news, but European shares fell on a potential price war in French telecommunications.

Japan's central bank, under intense political pressure to overcome deflation, doubled its inflation target to 2 percent. The BoJ also said it had decided to switch to an open-ended approach to buying assets each month next year, setting no deadline for completing the purchases.

The euro was down 1.3 percent on the day at 117.78 yen, though off a session low of 117.31 yen. The euro was hurt by a German newspaper report saying Germany's regulator had ordered large banks to simulate a break-up.

The Dow Jones industrial average rose 62.51 points, or 0.46 percent, at 13,712.21. The Standard & Poor's 500 Index was up 6.58 points, or 0.44 percent, at 1,492.56. The Nasdaq Composite Index was up 8.47 points, or 0.27 percent, at 3,143.18.

NYMEX - NEW YORK, Jan 22 (Reuters) - U.S. crude futures rose on Tuesday on Bank of Japan's plans for asset buying and on supportive investor confidence data from Germany that bolstered expectations for fuel demand.

CBOT Soyoil - Soybean futures on the Chicago Board of Trade rose 1.6 percent and set a one-month high on news China bought optional-origin soybeans and talk that it may be looking for more, traders said.

 

·         USDA said private exporters reported sales of 120,000 tonnes of optional origin soybeans to China for delivery in 2013/14.

 

·         USDA reported export inspections of U.S. soybeans in the latest week at 48.075 million bushels, above a range of trade estimates for 35 million to 45 million.

 

·         March soybean contracts reached $14.60-3/4, its highest level since Dec. 19, and settled at $14.51-3/4, ending above its 200-day moving average for the first time since Dec. 18.

 

·         March soyoil gapped higher at the open and set a near three-month high at 52.67 cents per lb before settling at 52.43 cents.

 

·         CFTC data showed managed funds expanded their net long position in CBOT soybeans in the week ended Jan. 15, changing course after cutting their net long in each of the previous three weeks.

 

·         Analyst Oil World cut its forecasts for Argentina's 2013 soybean harvest to 52 million tonnes, down 1 million from its previous estimate, but raised its forecast of Brazil's crop to 81.5 million tonnes, from 81 million last month. 

FCPO - KUALA LUMPUR, Jan 22 (Reuters) - Malaysian palm oil futures rose to their highest in more than two weeks on Tuesday, tracking gains in competing soyoil as dry weather in key South American soy-producing regions sparked concerns about edible oil supply as global demand recovers.

Dryness in parts of Argentina and Brazil could hurt South America's soybean yields and turn buyers towards palm oil, which is currently trading at a discount of more than $300 a tonne.

Malaysian palm oil exports fell 19 percent in the first twenty days of January, improving fractionally from a steeper drop earlier in the month and raising hopes that demand would pick up and cut record high stockpiles in the world's No.2 producer.

"Exports are improving slightly -- it's still not so good, but it should be improving," said a trader with a foreign commodities brokerage in Kuala Lumpur.

"The market has broken the resistance level of 2,445-2,450 ringgit of the third month benchmark. Technically the market looks more supportive," he added.

The benchmark April contract  on the Bursa Malaysia Derivatives Exchange rose to 2,474 ringgit ($812) per tonne, the highest level since Jan. 7, before closing at 2,466 ringgit, a gain of almost 2 percent from the previous session.

Total traded volume stood at 35,955 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

Technical analysis shows palm oil is expected to rise towards 2,486 ringgit per tonne, as it has cleared resistance at 2,449 ringgit, said Reuters market analyst Wang Tao.

Brent crude rose above $112 a barrel on Tuesday, after Japan pledged to pump in more money to boost its economy, adding to positive growth signals from the United States and China in the past few weeks.

In competing vegetable oil markets, U.S. soyoil for March delivery  rose 1.5 percent to a near 3-month high on late Tuesday, underpinned by dry weather that sparked concerns about South America's soybean crop, which is forecast to hit to record highs this year. 

Regional Equities - BANGKOK, Jan 22 (Reuters) - Southeast Asian stock markets edged lower on Tuesday, recouping some of their earlier losses as the Bank of Japan's bold policy lifted optimism about more fund flows to the region, bolstering late buying in large caps such as Singapore and Thai banks.

Singapore's Straits Times Index  ended down 0.05 percent at 3,219.86, with shares in United Overseas Bank Ltd  among actively traded, up 0.9 percent. Bangkok's SET index  fell 0.44 percent to 1,434.09.

Among bright spots in Bangkok, shares in Krung Thai Bank Pcl  gained 3.9 percent. Citi Research has raised its price target for Krung Thai Bank, citing strong revenue outlook and lower risk of future provision. 

Philippine Composite Index fell 1.1 percent to 6,104.90, snapping three sessions of gains. It had set a record finish of 6,171.70 on Monday.

Malaysia's index was down 0.43 percent at 1,628.66, after Monday's 2.4 percent loss amid concerns about the country's upcoming election.

Trader's highlight

NYMEX Crude Oil - SINGAPORE, Jan 21 (Reuters) - U.S. crude slipped towards $95 per barrel on Monday, on track for its first fall in four sessions, after a surprise drop in U.S. consumer sentiment dented the outlook for demand in the world's biggest oil user.

FCPO - SINGAPORE, Jan 21 (Reuters) - Malaysian palm oil futures edged up on Monday, supported by dry weather concerns in South America's soy-producing regions although gains were limited by the latest cargo surveyor data pointing to weaker exports of the tropical oil.

A turn to dry weather in Argentina and in southern Brazil may lead to a lower supply of soybeans and soybean oil, shifting some demand to competing palm oil that is trading at a hefty discount of above $300.

But price upside could be limited as exports continued to fall, easing 17.3 percent for the first 20 days of the month to 830,830 tonnes from 1,004,159 tonnes a month ago, cargo surveyor Intertek Testing Services said on Monday.

Another cargo, surveyor Societe Generale de Surveillance, reported a 20 percent decline to 813,778 tonnes for the same period.

"The market is holding on South American weather worries and some chart-based buying interest," said a trader with a local commodities brokerage in Malaysia. "But at the same time exports are lower and end-stocks are building up."

At the close, the benchmark March contract on the Bursa Malaysia Derivatives Exchange gained 0.8 percent to 2,420 ringgit ($798) per tonne.

Total traded volume stood at 25,074 lots of 25 tonnes each, a tad higher than the usual 25,000 lots.

Malaysia's weather office issued a heavy rain advisory on Monday, saying intermittent rain may cause floods over low-lying areas that could disrupt production in key palm producing states of Pahang and Johor.

A lower output may help ease Malaysian palm oil stocks, currently at a record-high 2.63 million tonnes, although traders point out that exports are also lower.

Market participants will also be looking out for the impact of India's latest crude edible oils import duty of 2.5 percent which is aimed at curbing imports and protecting local refiners.

Regional equities - BANGKOK, Jan 21 (Reuters) - Malaysia's main index fell 2.4 percent on Monday, its biggest one-day fall since September 2011, as concerns about the country's upcoming election triggered selling in recent gainers while flood-hit Indonesia erased earlier gains to fall.

Malaysia's Kuala Lumpur Composite index closed at 1,635.63, its lowest since Dec. 10, led down by a 5 percent drop in telecommunications operator Axiata Group Bhd and a 4 percent loss in Digi.Com Bhd

The selloff took its year-to-date loss to 3.2 percent, one of Asia's worst performing markets and sliding near an oversold mark, with the 14-day relative strength index (RSI) at 31.87, the lowest in the region.

Retail investors sold shares worth a net $7.27 million while foreign investors sold a net $331,900, countering a net buying of $7.87 million by local institutions, the Malaysian bourse said.

Jakarta's Composite Index was down 0.6 percent at 4,439.97 after a record close of 4,465.48 on Friday. Major floods which hit Jakarta have raised concerns of a rise in inflation.

"Given a lingering poor market sentiment, the one-off inflation could post a near-term market risk," Deutsche Bank Markets Research said in a report.

Elsewhere in the region, the Philippine indexwas up 0.53 percent at 6,171.70, setting a record finish for a ninth time so far in January. Thai SET index edged up 0.4 percent at 1,440.48, a 17-1/2 year closing high.

The Ho Chi Minh Stock Exchange's VN Index fell for a third session on Monday, closing down 1.4 percent at 447.79, the lowest close in almost two weeks. Investors took profits in recent gainers such as financials.