Palm hits 1-week low tracking global sell-off in stocks

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KUALA LUMPUR (Oct 11): Malaysian palm oil futures closed 1% lower on Thursday, after touching its lowest level in more than a week, tracking losses in global stocks and commodities markets.

European stocks slumped to a more than 18-month low on Thursday, after Wall Street's worst loss in eight months triggered a sell-off in global shares.

Oil prices also fell to two-week lows as global stock markets fell, with investor sentiment taking a further hit after an industry report showed U.S. crude inventories rose more than expected.

Palm oil prices are impacted by crude oil's movement, as the edible oil is used as feedstock to make biodiesel.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange ended 1.1% lower at 2,170 ringgit (US$521.89) a tonne.

It earlier fell to 2,153 ringgit, its weakest level since Oct 2.

Trading volumes stood at 32,903 lots of 25 tonnes each at the end of the trading day.

"Palm is tracking the global sell-off in stock markets and weakness in crude oil prices," said a Kuala Lumpur-based futures trader.

In other related oils, the Chicago December soybean oil contract edged down 0.6%, while the January soybean oil contract on the Dalian Commodity Exchange fell 1.7%.

The Dalian January palm oil contract declined 1.7%.

Palm oil prices are affected by movements of other edible oils, as they compete for a share in the global vegetable oils market.

Palm oil may fall more into a range of 2,162-2,171 ringgit per tonne, as suggested by a projection analysis, said Reuters market analyst for commodities and energy technicals, Wang Tao.

Palm, soy and crude oil prices at 1030 GMT

Contract Month Last Change Low High Volume
MY PALM OIL OCT8 2091 -27.00 2090 2097 52
MY PALM OIL NOV8 2128 -22.00 2111 2133 1780
MY PALM OIL DEC8 2170 -23.00 2153 2177 13736
CHINA PALM OLEIN JAN9 4718 -82.00 4682 4800 342478
CHINA SOYOIL JAN9 5874 -100.00 5836 5986 562528
CBOT SOY OIL DEC8 28.65 +0.00 0 0 0
INDIA PALM OIL OCT8 583.10 -5.10 582.50 585.6 383
INDIA SOYOIL OCT8 748 -0.95 747.4 749.25 4160
NYMEX CRUDE NOV8 71.94 -1.23 71.63 72.76 167546

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel

(US$1 = 4.1580 ringgit)
(US$1 = 6.9223 Chinese yuan)
(US$1 = 74.1250 Indian rupees)