Palm hits five-month low on weakness in related oils

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KUALA LUMPUR (Dec 7): Malaysian palm oil futures extended falls into a fourth session on Thursday, hitting their lowest in nearly five months in the evening, tracking weakness in related edible oils.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed 1.3% down at 2,502 ringgit (US$612.33) a tonne, having touched its lowest since July 19 at 2,499 ringgit.

Palm oil has shed about 3.9% so far this week, heading for a sixth weekly fall, and is down by about 10% since Nov 1.

Traded volumes stood at 32,052 lots of 25 tonnes each by Thursday evening.

"Palm fell in the evening in line with sharper declines seen in soyoil on the Chicago Board of Trade," one Kuala Lumpur-based trader said, adding heavy losses on China's Dalian Commodity Exchange could extend palm's downside.

"I'm also worried about the stock levels in the country," another trader said. 

November's palm oil inventory levels are expected to come in at 2.44 million tonnes, up 11.4% from the previous month, a Reuters poll showed. Official data from the Malaysian Palm Oil Board is scheduled for release on Dec 12.

That would be Malaysia's highest stock level in two years.

In related oils, the January soybean oil contract on the Chicago Board of Trade fell 0.6% and the January soybean oil contract on the Dalian Commodity Exchange retreated by 2%.

The Dalian January palm olein contract declined by 1.7%.

Palm oil prices are affected by movements in other edible oils competing in the global vegetable oils market.

Palm oil could test support at 2,519 ringgit a tonne, a break below which could cause a loss to the next support at 2,491 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
 Palm, soy and crude oil prices at 1052 GMT

Contract Month Last Change Low High Volume
MY PALM OIL DEC7 2438 -25.00 2418 2441 94
MY PALM OIL JAN8 2473 -32.00 2471 2501 1061
MY PALM OIL FEB8 2500 -33.00 2499 2530 16126
CHINA PALM OLEIN MAY8 5316 -88.00 5292 5388 364918
CHINA SOYOIL MAY8 5880 -110.00 5860 5990 379818
CBOT SOY OIL JAN8 32.97 +0.00 32.93 33.23 7326
INDIA PALM OIL DEC7 568.40 -5.90 568.00 574.9 1325
INDIA SOYOIL DEC7 717 -4.65 715 722.8 8360
NYMEX CRUDE JAN8 56.25 +0.29 55.82 56.30 95582

 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 = 4.0860 ringgit)
(US$1 = 64.5700 Indian rupees)
(US$1 = 6.6152 Chinese yuan)