Malaysian crude palm oil futures ended lower on Monday, surrendering early gains, following a bearish supply and demand outlook from the market's leading forecaster. Dealers said they expected the market to see light or average volumes until Friday's official crop and trade data for November from the Malaysian Palm Oil Board. Two cargo surveyors are also scheduled to release before the weekend export estimates of oil palm products for the first 10 days of December.
"It's going to be tight, unpredictable market until Friday, from what I see," said a dealer.
Bursa Malaysia Derivatives' third-month palm oil contract, February, closed down 5 ringgit at the day's low of 1,413 ringgit ($371.84) a tonne after rising as much as 8 ringgit at one stage.
Overall trade was average at 4,513 lots of 25 tonnes each.
The market usually sees a volume of 3,000 lots or more on a busy morning.
Prices were up in the morning after tracking a higher close in rival Chicago soyoil last week.
Soy and palm compete for the same export destinations and their prices often move in step.
Soyoil futures on the Chicago Board of Trade closed up 0.03 to 0.25 cent a lb on Friday, spurred by short-covering in soybean futures.
But a revised outlook from leading forecaster Ivan Wong for palm oil supply and demand between November and February weakened Bursa Malaysia futures in Monday's late trade.
Wong raised his forecast for Malaysia's palm oil output in November to 1.235 million tonnes, from the 1.195 million to 1.2 million tonnes he estimated two weeks ago.
He also cut his prediction for November palm oil exports to 1.055 million tonnes from 1.1 million to 1.105 million tonnes previously.
As a result, his projection for end-November stocks of palm oil rose to 1.43 million tonnes, from the 1.35 million to 1.36 million tonnes he had estimated previously. Wong gives the market an idea of what the Malaysian Palm Oil Board could say about production, exports and closing stocks for November in official data due on Friday.
In physical trade of Malaysian crude palm oil on Monday, the contract for December saw bids/offers closing at 1,450/1,455 ringgit a tonne in Malaysia's southern and central regions, unchanged from Friday.
Deals were reported at 1,450 ringgit in the south and 1,447.50-1,450 in the central zone.
Physical oil for January saw buyers at 1,440 ringgit a tonne and sellers at 1,450, versus Friday's 1,435/1,450. Trades were reported at 1,440 in the south.
PALM OIL FUTURES:
December (south): 1455.
Open/High/Low: 1424/1426/1413.
Previous close: 1455.
PALM OIL PHYSICALS:
February (3rd month): 1413.
Previous settlement: 1418.
FUTURES: Benchmark February down 5 ringgit to 1,413 ringgit ($371.84) a tonne.
PHYSICALS: December offers flat from Friday's close.
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