Palm oil slips

Malaysian palm oil futures fell on Friday and hit their lowest level in 3 weeks, snapping a two-week uptrend, on rising scepticism among investors about the sustainability of the robust export demand seen this month. Palm futures in Malaysia, which set the tone for global prices of the tropical oil, have dropped for four out of the past five sessions, although data showing a surge in May exports by the second-biggest producer limited losses. The contract clawed back some gains on Thursday as weak prices attracted bargain hunters, but brewing doubts on demand from key buyers in the coming months weighed.
"Things are a little on the negative side, but export numbers have been awesome of late. That has provided some support," said a trader with a foreign commodities brokerage in Kuala Lumpur. Cargo surveyor data showed an up to 53 percent surge in shipments of Malaysian palm oil between May 1-20. "But some people feel that the good exports will taper off at the end of the month and it would not remain at this pace ... this pace is just too good to be true," the trader added.
The benchmark August contract on the Bursa Malaysia Derivatives exchange had sunk 1.02 percent to 2,136 ringgit ($596.31) a tonne. In afternoon trading prices touched the 2,127 ringgit level, their lowest in three weeks. Palm is down 1.4 percent for the week, its first decline after two weeks of gains. Total traded volume stood at 34,598 lots of 25 tonnes each, below the average 35,000 lots.
The El Nino weather phenomenon predicted by meteorologists could push depressed palm oil prices as high as $700 a tonne this year, an industry group in top producer Indonesia said on Friday, although any impact on production would not come until early 2016. Meanwhile, Malaysia's Sime Darby Bhd, the world's largest listed palm oil producer, reported a 54.7 percent drop in its third-quarter net profit amid weaker prices of the tropical oil and lower earnings at its industrial and motors businesses. The US July soyoil contract was down 0.31 percent by 1036 GMT, while the most active September soybean oil contract on the Dalian Commodity Exchange inched down 0.07 percent.