Palm oil slips on economic woes, comparative oils
The benchmark October contract on the Bursa Malaysia Derivatives Exchange ended at 3,101 ringgit ($1,043) per tonne, but off an earlier low of 3,100 ringgit.
Traded volumes for the contract were 10,163 lots of 25 tonnes each, compared to 9,607 lots on Wednesday.
"We have seen a lot of bearish pressure across the board, linked to the big macroeconomic picture in the United States, plus the fact that crude is slightly cheaper," said Abah Ofon, a Singapore-based analyst at Standard Chartered Bank.
The latest figures continued to paint a sombre picture for the US economy, with the pace of growth in the services sector falling in July to its lowest since February 2010, while new US factory orders also fell in June.
The reports followed poor figures on US consumer spending and factory activity. That, along with the festering European debt crisis, is likely to keep buyers cautious.
The yen tumbled from near record highs after Japan intervened to curb the currency's export-damaging strength, while world stocks held above 2011 lows as expectations grew for more policy action in developed countries.
Ofon added that further price pressure in August may come from a build-up of stocks in Indonesia ahead of an expected change in the export tax rate this month.
Indonesia, the world's biggest palm oil producer and exporter, could lower the maximum export tax rate in August. Ofon forecasts second half benchmark prices to average 3,400 ringgit.
In comparable markets, US soybeans for November delivery eased, while the most active May 2012 soyoil on China's Dalian Commodity Exchange also dipped.
"Sluggish US soyoil due to a weak global economy and favourable crop weather in US soybean planting regions pressured China's soyoil market," said Zhan Zhi Hong, an oil analyst with Shenzhen-based China Merchant Futures.
"Choppy trade will continue in China's soyoil if US markets fail to set a clear and strong direction," she added.
This week, benchmark palm oil prices have been supported by rising export data, leading to a near two-week high of 3,144 ringgit on Thursday.
Exports of Malaysian palm oil products for July jumped 13.5 percent to 1,628,688 tonnes, cargo surveyor Societe Generale de Surveillance said on Monday.
Traders say the fasting month of Ramadan will also lead to lower output in Indonesia and Malaysia, the top two global palm producers.
On Thursday, a leading agronomist said Southeast Asian palm oil output growth will slow in the second half of 2011 as the impact of El Nino weather conditions from two years ago manifests with lower oil-yielding palm fruits.
"Now that is a very brave production outlook," said a Kuala Lumpur-based trader. "The majority of the market is expecting higher production this year. Time will tell."
Brent oil fell to a four-week low on Thursday after Japan's intervention to stem the rise in the yen boosted the dollar and anxiety about the extent of Europe's debt crisis curbed any interest in riskier assets.
On the economic calendar, investors are eagerly awaiting July's US non-farm payroll number, due Friday, and updated USDA crop forecasts due to be released on Aug. 11.
Copyright Reuters, 2011