SINGAPORE: Malaysian crude palm oil futures eased on Monday as renewed worries about the euro zone debt crisis and investor caution ahead of key industry data trumped weather concerns in top oilseed producing regions.
The euro zone's November retail sales fell 0.8 percent, much steeper than a forecast of 0.2 percent, while the number of unemployed rose for the seventh consecutive month.
The negative numbers, raising fears of a slowdown in growth and commodity demand, coupled with investor concerns ahead of key industry data, weighed on the tropical oil.
"Until more is known about demand, weather in South America and most importantly the USDA and MPOB figures, the market will remain in the 3,160-3,240 ringgit range," said a trader with a local commodities brokerage in Kuala Lumpur, referring to the US Department of Agriculture and the Malaysian Palm Oil Board.
By the midday break, benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange fell 0.4 percent to 3,197 ringgit ($1,000) per tonne.
Traded volumes on Friday stood at 5,956 lots of 25 tonnes each, thinner than the usual 12,500 lots.
Traders are looking at prospects of dry weather in South America hurting soy yields and heavy Southeast Asian rains disrupting palm oil production.
The USDA will issue January world crop reports on Thursday and traders are expecting downgrades on South American crop forecasts. The industry is also expecting lower production figures from the MPOB December data, which is due Tuesday.
The Malaysian Meteorological Department issued heavy rain warnings for parts of Pahang and Sarawak, key producing states that account for almost 30 percent of national palm oil output.
While there have not been any reports of floods disrupting production in No.2 producer Malaysia, traders are watching the weather closely, as any severe drop in production will add pressure to tightening stocks.
Traders are also keeping an eye on export trends as moderating exports will help ease the pressure. Cargo surveyors Societe Generale de Surveillance and Intertek Testing Services will issue Jan. 1-10 Malaysian palm oil exports data on Tuesday.
On the demand side, the world's largest producer Indonesia reported a 5 percent drop in palm oil exports to 19.4 million tonnes last year, the agriculture ministry said on Monday, highlighting rising domestic consumption and downstream investment.
In other oil markets, Brent crude prices steadied around $113 a barrel on Monday as weaker euro zone employment and retail sales data boosted the dollar and dented sentiment, but concerns over Iran's threat to shut a key oil-shipping route capped price falls.
US soyoil for January delivery gained 1.1 percent, lifted by weather concerns in Argentina while the most active September 2012 soyoil contract on China's Dalian commodity exchange was almost flat.
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