European palm oil seen extending losses

European palm oil traders expect prices to ease further in coming weeks on weak exports and surging output in key producer Malaysia, traders said on Monday.
A sharp drop in prices in the past few weeks prompted buying in north-western Europe to rebuild stocks but traders said most consumers were well covered in the short term and would wait for the market to fall further.
"I certainly don't expect the market to go bullish," one Dutch broker said. "There is room for further downside.
"People seem to have enough in stock to cover nearby needs, so they can afford to wait."
Malaysian crude palm oil futures, which set the tone in Europe, have lost more than 20 percent since April due to worries over sagging exports and losses by Chicago soyaoil futures.
Societe Generale de Surveillance, the leading cargo surveyor for Malaysian palm oil, has estimated exports for June 1-10 at 268,230 tonnes, against 334,522 tonnes in the same period in May and 373,695 tonnes a year ago.
Slow demand led to a rise in Malaysian palm oil stocks to 1.04 million tonnes at end-May, up 4.1 percent from 1.0 million tonnes at end-April, official data showed on Monday.
A UK trader said weaker palm oil prices had allowed consumers in Europe to replace stocks.
"We have seen a natural rebuilding of stocks. Prices have come down and the large premiums have also eroded," the trader said.
A Dutch trader said: "Palm oil has taken a knock recently, which has stimulated some buying activity. But it was not massive".
Crude palm oil was offered at $430 a tonne cif Europe for August/September and at $427.50 for October/December, both unchanged from Friday.
Palm oil stocks in Rotterdam rose last week to 81,119 tonnes from a low of around 63,000 tonnes in mid-May.
Traders said the weather in the United States and its impact on the country's soybean crop would be another factor in coming weeks.
Analysts forecast an increase in palm oil imports in western Europe, primarily the Netherlands, this year as crushers would try to meet increased demand in the enlarged European Union of 25 countries.
Dutch vegetable oil refineries had already announced plans to expand or build new capacity for palm oil processing, said Pascal Cogels at the European trade organisation Fediol in Brussels.
"The fact that we went from 15 to 25 EU countries means bigger palm oil imports. That could be seen in the refineries' plans to upgrade and expand capacity," Cogels said.