KUALA LUMPUR (July 24): Malaysian palm oil futures fell to their lowest in a week in early trade on Tuesday, in line for a second consecutive session of losses, on expectations that production will rise in the coming weeks.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 0.3% to 2,162 ringgit (US$531.86) a tonne at the midday break. It earlier fell to 2,158 ringgit, its lowest levels since July 16.
Trading volume stood at 14,694 lots of 25 tonnes each at noon.
"The market is down on concerns that production will rise," said a futures trader in Singapore, adding that the immediate focus is on the export data scheduled for release on Wednesday.
A rise in palm oil output, which seasonally begins in the third quarter of the year, typically adds to inventory levels and weighs on prices.
Increasing exports could help reduce stockpiles. Malaysian shipment data from cargo surveyors for the July 1-25 period is scheduled for release after 0300 GMT on Wednesday.
Weakness in related edible oils is also dampening sentiment for palm, added another futures trader. Palm oil prices are usually impacted by the performance of other edible oils, as they compete for a share in the global vegetable oils market.
In other related oils, the Chicago December soybean oil contract fell 0.1%, while the September soybean oil contract on China's Dalian Commodity Exchange
Meanwhile, the Dalian September palm oil contract was down 0.3%.
Palm oil may break a support at 2,149 ringgit per tonne and fall to the next support at 2,123 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.
Palm, soy and crude oil prices at 0432 GMT
|MY PALM OIL||AUG8||2111||-19.00||2109||2126||156|
|MY PALM OIL||SEP8||2156||-7.00||2152||2161||1436|
|MY PALM OIL||OCT8||2162||-7.00||2158||2167||5693|
|CHINA PALM OLEIN||SEP8||4666||-14.00||4622||4672||126592|
|CBOT SOY OIL||DEC8||28.28||-0.04||28.22||28.35||2134|
|INDIA PALM OIL||JUL8||0.00||+0.00||0.00||0||0|
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 = 4.0650 ringgit)
(US$1 = 68.9250 Indian rupees)
(US$1 = 6.8088 Chinese yuan)