* Palm oil may rally to 3,300 rgt/t, U.S soyoil 46 cents/lb
* Biofuel mandates may curb soyoil exports

08/03/2010 (Reuters), Kuala Lumpur - The world's two most traded vegetable oils, palm and soy, are in a bull phase 45-month price cycle and may go higher on tight supplies and growing demand, a top analyst said.

Oilseed analyst Anne Frick with Prudential Bache Commodities said U.S. July soyoil BON0 could rally 12.4 percent to 46 cents per lb and Malaysian palm oil futures KPOc3 may grow 23.6 percent to 3,300 ringgit ($982.7) a tonne from current prices.

"My time frame for an advance is until June but I expect to see the soybean oil prices weaken over the summer if the U.S. soybean crop has no problem," Frick told Reuters in an email response ahead of the Bursa Malaysia Palm Oil Conference.

"In palm oil, the timing of the peak may be influenced by soy oil but possibly on how quickly the market rallies and whether the advance is seen as "too far, too fast".

Palm oil may go as low as 2,300 ringgit but might not reach that level if Malaysian output gets worse in late 2010 and early next year due to El Nino driven hot weather earlier on, she said.

Top palm oil supplier Indonesia could make up the output shortfall as more oil palms mature and mitigate the impact of El Nino, traders and analysts have said.
Soybean oil's low side may be 36 cents per pound when there is more "confidence" in production if the U.S. soybean and South American crop are relatively intact.

The amount of soyoil extracted and exported will depend, to some extent, on demand for soybean meal that is used an animal feed. So far, livestock numbers are still down in some countries and are just recovering from recession levels, Frick said.

Rising biofuel mandates in Argentina, Brazil and the U.S. could see more soyoil diverted into the energy sector as crude oil prices CLc1 go above $80 a barrel.

"If biodiesel production in the U.S. expands enough to meet the 1.15 billion gallon mandate by the end of 2010, then soybean oil (because of its more ready availability) will need to account for a larger share (over 50 percent) of the feedstock," she said.

Argentina's preference to tax soyoil exports more than its biofuel variant could also hold South American soyoil exports below their potential, traders and analysts said.

U.S.-based Frick said Argentina could ship more soyoil exports if Argentine farmers market their soybeans in a "timely fashion" rather than confront the financially strapped government with a strike over the taxes.

(If the strikes happen), the result could be an upward push on U.S. soybean oil exports which are normally very small relative to those of Argentina and Brazil," she said. "It could also boost export demand for palm oil which already dominates the world export picture."