Palm oil barely moves on bleak global economic outlook

Palm oil prices have been see-sawing in September, torn between the bleak global economic outlook and prospects of strong demand ahead of key public holidays in top buyers India and China next month.

"When palm oil goes below 3,000 ringgit, there is no follow-through selling. When it goes above 3,000 ringgit there is no follow-through buying. The keyword is caution," said a trader with a foreign brokerage in Malaysia.

Benchmark December palm oil on the Bursa Malaysia Derivatives Exchange shed 1 ringgit to end at 3,066 ringgit ($982.85) per tonne.

Overall volumes were light, with 21,933 lots of 25 tonnes each changing hands, compared to the usual 25,000 lots.

Reuters analyst Wang Tao forecast prices would be technically neutral as long as palm oil remains in a range of 3,000-3,083 ringgit per tonne.

Palm oil has lost almost 20 percent so far this year on high stocks and a slowdown in demand after the Muslim Eid festival in late August.

But last minute orders are likely to pour in ahead of India's Diwali festival in late October and China's Golden Week holiday early next month.

Exports are starting to show a recovery trend. Malaysia's Sept. 1-20 palm oil exports fell 16.4 percent to 978,087 tonnes from 1,170,226 tonnes shipped during Aug. 1-20, cargo surveyor Intertek Testing Services said on Tuesday.

That is in comparison to exports in the first ten days of September dropping 36.4 percent to 377,038 tonnes from the same period a month ago.

Brent crude futures pushed slightly higher on Wednesday but moves were muted as investors awaited a US Federal Reserve policy meeting in which the bank is expected to announce further steps to stimulate the economy.

US soyoil for October delivery rose 0.3 percent during Asian hours as concerns of drought in the US Plains spurred some buying. The most active May 2012 soybean oil contract on China's Dalian Exchange fell.

Copyright Reuters, 2011