Palm oil eases

Malaysian palm oil futures extended losses to end lower on Wednesday, weighed down by lower-than-expected export data and as traders booked profits after recent gains. By the close, the benchmark December palm oil contract on the Bursa Malaysia Derivatives exchange was down 3.1 percent at 2,374 ringgit ($540) a tonne, but stayed near the 15-month high of 2,460 ringgit touched in the previous session.
"The market finally decided to do a correction," said a trader at a foreign commodities brokerage in Kuala Lumpur. "Today is on the back of the export figure ... some profit-taking on the back of the export figure." Traded volume stood at 60,920 lots of 25 tonnes each, above the average 35,000 lots usually traded daily. On the data front, exports of Malaysian palm oil products rose 0.5 percent or 0.7 percent in September from August, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance.
Palm prices had gained for six days in a row through Tuesday, however, and have climbed more than 20 percent this month, the best monthly gain since April 2009. Worries that the El Nino dry weather pattern will lead to scorching temperatures in Southeast Asia and hurt palm yields, have also supported palm prices. El Nino is likely to slash Malaysia's palm oil output by 1 million tonnes to 19 million tonnes in 2016, and boost prices to 3,000 ringgit per tonne, the chief executive officer of the Malaysian Palm Oil Council said on the sidelines of an industry conference where various leading analysts gave forecasts.
Separately, an industry group in Indonesia said production in the world's top palm producer would fall by as much as 5 percent in 2016 due to El Nino. An Indonesian palm trader said recent gains in palm prices were a little overdone and that the El Nino impact had been largely factored into prices now. Palm demand was now expected to taper off in the coming days due to the one-week Chinese National Day break. China is a major palm buyer. In competing vegetable oil markets, the US December soyoil contract was down 0.9 percent in early Asian trading, while the most active January soybean oil contract on the Dalian Commodity Exchange added 0.3 percent.