SINGAPORE: Malaysian palm oil futures fell to a 2-week low on Thursday, extending losses for a third straight session as weak sentiment continued to dominate the market with investors worrying over record high stocks.
Traders are looking out for Malaysia's palm products export figures for November due Friday, with expectations of a slight decline compared to a month ago. The latest data for first 25 days of the month showed a drop of less than 2 percent.
A lower export demand may push Malaysian inventory levels slightly higher in November despite slowing production.
"The market is still under pressure. Exports should be down by more than 1.5 percent for the month," said a trader with a foreign commodities brokerage in Malaysia.
"People are asking whether production can neutralise exports, and I think it's unlikely that stocks will go up sharply," he added.
By the midday break, the benchmark February contract on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,372 ringgit ($777) per tonne. Prices earlier touched a low of 2,367 ringgit, a level last seen on Nov. 14.
Technicals suggested palm oil is expected to test a support at 2,353 ringgit, a break below which will lead to a further drop to 2,288 ringgit.
Total traded volumes stood at 9,955 lots of 25 tonnes each, thinner than the usual 12,500 lots, as some traders remained on the sidelines ahead of top analysts presenting their price forecasts for 2013 at the Indonesian Palm Oil Association's two-day conference in Bali on Thursday and Friday.
Palm oil output in the world's biggest producer Indonesia is expected to climb 7 percent next year to 27 million tonnes, a top industry association official said on the sidelines of the conference, as three years of acreage expansion efforts bear fruit.
Two trading sources also told Reuters at the conference that India's oilseed industry has submitted a proposal to the government to raise import taxes on palm oil and other edible oils, arguing demand for local output is being hurt after a sharp fall in prices.
In related markets, Brent crude rose on Thursday, as US lawmakers appeared to be inching closer to a deal on the "fiscal cliff" and tensions in the Middle East worsened.
In other vegetable oil markets, US soyoil for December delivery fell 0.3 percent in early trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange lost 0.7 percent by the midday break.
Comments
Comments are closed.