Malaysian palm oil falls

Malaysian palm oil futures rose to a near two-week high before reversing gains to end down on Monday, as lower than expected export data offset rising crude prices. Benchmark July crude palm oil contract on Bursa Malaysia Derivatives Exchange closed at 3,360 ringgit ($1,118) a tonne. Earlier, prices touched a high at 3,384 ringgit, a peak not seen since April 12.
Trading volumes were light, with 8,027 lots of 25 tonnes each, compared to a total at 13,829 lots on Friday. Palm oil, used in products such as food, cosmetics, tyres and biofuels, rose 4 percent last week. "The exports were not so good - slightly down compared with last month," said one trader. Exports of Malaysian palm oil products for April 1-25 fell 7.7 percent to 865,593 tonnes from 937,591 tonnes shipped during March 1-25, cargo surveyor Intertek Testing Services said.
"Essentially its a third month in a row of pretty weak demand," said a palm oil analyst. "On a percentage basis, it seems to be not getting any worse." Later on Monday, cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products for April 1-25 fell 0.7 percent to 947,470 tonnes from 954,441 tonnes shipped during March 1-25. Most-active January 2012 soyoil on the Dalian Commodity Exchange traded at 10,438 yuan versus an open at 10,478 yuan, a near two-week high.
"Palm oil is a little under because of the low export number, coupled with concern on higher production," said a dealer. "Today range-bound trading at 3,340-3,380. There has been also been some speculative buying." Output in Southeast Asia, which produces more than 90 percent of the world's palm oil, enters a higher cycle in the second half of the year.
US grains rallied on Monday after a holiday weekend, with corn and wheat adding around 2 percent each, on continuing worries about weather in major growing areas and limited stockpiles. Oil rose above $124 a barrel on Monday, pushed higher by an escalation of violence in the oil-producing Middle East, as well as post-election unrest in Opec member Nigeria.
Palm oil is less likely to be channeled into biofuels because of a lack of government subsidies, but mandates in Brazil and the United States may see more soyoil taken up, which leaves palm oil to lead the food sector. On the corporate calendar, noodle maker with some palm plantation assets, Indofood CBP, releases its first quarter earnings later this week.