Palm oil falls

Malaysian palm oil futures fell to their lowest in two weeks on Friday and made their biggest weekly tumble in 12, as oversupply concerns were compounded by signs that buyers could switch to competing oils as the difference between prices has narrowed.
By Friday's close the August palm oil contract on the Bursa Malaysia Derivatives exchange was down 0.7 percent at 2,277 ringgit ($605.91) a tonne, recovering slightly from a low of 2,254 ringgit hit earlier in the session, the benchmark's lowest level since June 1.
The contract declined 2.8 percent this week, its biggest weekly decline since March 20.
"Prospects for some demand to be switched to soyoil has the market reluctant to move higher," said a trader with a local commodities brokerage in Kuala Lumpur. The trader noted that soyoil was now approaching a $70 premium to palm, down from the normal gap of around $120.
"Until weather cuts production, supplies should remain burdensome unless 2015 output is significantly smaller than previous estimates." Traded volume was heavy at 46,946 lots of 25 tonnes each, well above the more usual 35,000 lots. Indonesia, the world's top exporter of the edible oil, will begin imposing a $50 per tonne levy on crude palm oil and $30 for processed palm products exports from June 15, the country's chief economic minister said on Friday.
A rally that took palm prices to three-month highs earlier in June may run out of steam as buying ahead of the Muslim festival of Ramadan fades and markets brace for growing supply as the main harvest approaches, traders and analysts said. Data from regulator the Malaysian Palm Oil Board on Thursday showed palm oil stocks last month swelled to their highest since November to stand at 2.24 million tonnes, overturning expectations that robust export demand would dent inventories.
In competing vegetable oil markets, the US July soyoil contract inched up 0.1 percent, snapping four days of declines, in late Asian trade but was headed for its biggest weekly fall since May. Meanwhile the most active September soybean oil contract on the Dalian Commodity Exchange fell 1.56 percent after hitting its lowest level in more than two weeks.