Malaysian palm oil futures hit an eleven-month low on Monday, as other vegetable oils traded lower and expectations of weak demand and higher output in the coming weeks weighed on prices. By the close, benchmark palm oil for October on the Bursa Malaysia Derivatives Exchange ended 3.1 percent lower at 2,055 ringgit ($534) a tonne. Prices earlier fell to 2,049 ringgit, their lowest since September 11.
Traded volume stood at 39,909 lots of 25 tonnes each, above the roughly 35,000 lots usually traded by the close. "Dalian is down," said a trader with a foreign commodities brokerage in Kuala Lumpur. "US soybean oil on Friday night was also down. These are the main factors in the market. External markets are weak." The uncertain demand outlook, exacerbated by concerns about top buyer China, was overshadowing any upside from the impact of dry weather from the El Nino weather pattern, the trader added. In other vegetable oils, the US August soyoil contract eased 1.6 percent during late Asian trade, while the most active soybean oil contract on the Dalian Commodity Exchange slipped 1.9 percent.
US soybeans and corn futures slid for a second session on Monday due to forecasts of near-perfect weather across the US Midwest, which promises bumper supplies. Cargo surveyors' data on Friday for exports of Malaysian palm oil products in July came in lower than expected. "Exports in August don't look so good (and) production will rise in August," said a second palm trader on the supply outlook. Highlighting the trend of lower prices for the tropical oil, Indonesia's export tax for crude palm oil in August will be zero percent, unchanged from July, a trade ministry official said late on Friday. Also on the downside, crude oil fell to its lowest in six months, knocked by fresh evidence of growing oversupply and data highlighting slowing demand in China, leaving crude prices set for their weakest third-quarter performance since 2008.
Comments
Comments are closed.