Bullish USDA crop data sparked technical buying in crude palm oil on the European vegetable oil market [OILS/E] on Wednesday while liquid and laurics business failed to pick up, market sources said.

"CBOT rallied on a lower than expected crop forecast, which boosted buying in palm oil, but buyers seemed not g willing to pay the prices for liquids and laurics," one broker said.

At 1650 GMT CBOT soyoil futures <0#3BO:> were 0.60 to 0.76 cents per lb up with soybeans on the USDA crop and supply/demand data.

Palm oil moved up to $5 up on the day with Chicago after Malaysian palm oil futures <0#KPO:> closed slightly lower ahead of the USDA data on liquidation because of worries about rising palm oil stocks.

"European dealers expect Malaysia to follow Chicago up and started buying before Malaysia opens for the Thursday session," one dealer said.

Jan/March palm olein traded early in the day unchanged from Tuesday at $417.50 a tonne fob Malaysia.

Crude palm oil traded at $445 a tonne cif Europe for October shipment, Nov/Dec traded at $440 and $442.50, Jan/March fetched $445, Jan/June traded at $447.50 and $450 and July/Sept changed hands at $455 a tonne cif.

Liquid oils were offered well up on the day, but buyers were not willing to commit themselves and no business was reported. "Many buyers do not believe this rally will hold long," one trader said.

Lauric oils were offered up to $20 dollars higher but buyers showed no interest and no business was seen, dealers said.

Soybean futures on the Chicago Board of Trade soared on Wednesday, with the November contract nearly touching $6 for the first time in a month, on smaller-than-expected estimates of the U.S. soy crop and end stocks, traders said.

November soybeans <SX5> closed 25-1/2 cents per bushel higher at $5.89. The deferred months settled 19 to 24-1/2 cents firmer.

The government data triggered a short-covering rally by commodity funds. Buy stops were hit late in November at $5.86 and above $5.90. Funds bought 12,000 contracts, with Refco featured buying 5,000 November, traders said.

The U.S. Agriculture Department estimated the 2005 U.S. soy crop at 2.967 billion bushels, below an average of analysts' estimates for 3.014 billion. The cut reflected a 900,000-acre drop in soy plantings.

"Losing the 900,000 acres, basically that accounts for about 36 million bushels of production that the trade wasn't counting on losing," said Dan Cekander, an analyst with Fimat Futures.

USDA pegged 2005/06 U.S. ending soy stocks at 260 million bushels, down from an average of analysts' estimates for 291 million.

But both numbers were higher than USDA's September estimates for a crop of 2.856 billion bushels and 2005/06 end stocks at 205 million bushels.

In the world numbers, USDA raised its estimate for the Argentine 2005/06 soy crop to 40.50 million tonnes, from 39 million, but left its Brazilian soy estimate unchanged at 60 million tonnes. Those production forecasts were in line with trade expectations.

There was talk of fresh Chinese interest in U.S. soybeans this week.

The U.S. harvest was moving ahead, with supplies building at grain elevators, cash dealers said. Spot soy basis bids were steady to weak amid steady harvest sales.

USDA reported late Tuesday the U.S. soy harvest was 60 percent complete. Traders were expecting that level of harvest completion.

There were few, if any, harvest delays expected this week, with mostly clear weather forecast, Meteorlogix weather service said. There were rains overnight Tuesday in eastern Nebraska but any showers on Wednesday would be very light in the western belt. The eastern Midwest should be dry for the next five days, it said.

The soy products found support from the strength in soybeans. CBOT October soymeal <SMV5> closed $8.10 higher at $173.20 a ton and December <SMZ5> was up $8 at $175.90.

October soyoil <BOV5> was 0.70 cent per lb. higher at 24.10 and December <BOZ5> was up 0.61 at 24.19 cents.

Soyoil found an added boost from higher crude oil prices. The soyoil market has been tracking the energy markets in recent weeks amid rising demand for biodiesel, made largely from soybean oil.

Funds bought about 2,000 soyoil futures and 2,500 soymeal, traders said.

The government left the 2005/06 U.S. soymeal end stocks unchanged at 250,000 tons, but raised U.S. soyoil stocks by 30 million lbs. to 1.641 billion.

In the overnight delivery market, there were no October soymeal deliveries and there were light deliveries of 10 lots posted against the October soyoil contract.

A customer of Prudential Financial issued 10 lots, which were stopped by the house account of ADM Investor Services. The last trading day for the October contracts is Friday.

Malaysian palm oil futures closed weak on liquidation amid concerns about rising stocks, traders said.

Volume in soybeans was huge, estimated at 110,154 futures and 36,492 options. In soymeal, volume was pegged at 27,871 futures and 3,833 options. Soyoil trade was estimated at 32,157 futures and 3,076 options.