Malaysian palm oil falls

Palm oil fell on Monday as a smaller-than-expected decline in stocks gave traders an excuse to book profits although concerns over global vegetable oil supplies limited losses. A weaker Malaysian palm oil production trend into the first quarter of this year and drier weather potentially affecting soyabean yields in Argentina may support the vegetable oil complex.
"Some traders are extending long liquidation moves from last week thanks to the Malaysian Palm Oil Board data, but exports show some sign of starting to recover," said a trader with a foreign commodities brokerage. The benchmark March 2011 crude palm oil contract on Bursa Malaysia Derivatives settled down 0.9 percent to 3,730 ringgit ($1,215.182) per tonne. Overall traded volume stood 22,422 lots of 25 tonnes each, compared to the usual 15,000 lots.
Other players said palm oil export data for the first ten days of January did little to lift the market, with most of the gains coming from crude oil edging close to $90 a barrel. Cargo surveyor Intertek Testing Services on Monday said Malaysian palm oil exports for January 1-10 rose 0.75 percent to 300,250 tonnes from the same period in December.
Another cargo surveyor Societe Generale de Surveillance said exports for the same period slipped 5.7 percent to 331,655 tonnes, slowing from a 9 percent decline a month ago. "Exports are a little better but it remains to be seen if any new price rally destroys demand further," said another trader in Malaysia. "Supply is still a concern."
Malaysian palm oil futures rallied to a 33-month high last week on global vegetable oils supply anxieties as heavy rains in the country's major producing states and dryness in South America have stalled production of palm oil and soyabean. Other vegetable oils were mixed in Asian trade. US soyaoil for January delivery, which is used as a feedstock for biofuel, rose 0.6 percent in Asian trade hours. In China, the most active September 2011 soyaoil contract on Dalian Commodity Exchange fell 1 percent. "China's soyaoil market is waiting for new leads. It is likely to trade steadily until Lunar New Year," said an oil analyst with a Shanghai-based local brokerage.