Palm eases to 2-week low, tracking weakness in overnight soyoil

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KUALA LUMPUR (June 10): Malaysian palm oil futures fell to a two-week low during the first half of trade on Monday, weighed down by losses in overnight soyoil on the US Chicago Board of Trade (CBOT).

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was last down 0.6% at RM2,016 (US$484.38) per tonne at the midday break.

It earlier fell to RM2,013, its weakest level since May 24.

Palm oil may break a support at RM2,019 per tonne and fall into a range of RM1,960-1,997, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

"Palm prices are taking cue from continuous weakness in rival oilseed," said a palm oil futures trader, referring to US soyoil.

He added that the market was also cautiously trading on expectations of export data showing weaker demand in the first ten days of June.

Malaysian palm oil exports in June 1-10 period fell 31.6% from the corresponding period in May, according to an independent inspection company AmSpec Agri Malaysia.

Slowing export demand could contribute to rising inventory levels and weigh on benchmark palm oil prices. Malaysian palm oil stockpiles last fell 6.6% in April to 2.73 million tonnes.

Industry regulator the Malaysian Palm Oil Board is scheduled to release inventory, production and export data for May on June 12.

Meanwhile, the Chicago July soybean oil contract had declined 1.4% on Friday, and was down again on Monday by 0.2%.

US soy, wheat and corn prices charted declines as US farmers are expected to get a window of dry weather this week for planting activity.

In other related oils, the September soyoil contract on the Dalian Commodity Exchange rose 0.4%, and the Dalian September palm oil contract edged up 0.1%.

Palm oil prices are affected by movements in related edible oils, with which it competes for global market share.

Palm, soy and crude oil prices at 0441 GMT

Contract           Month    Last  Change     Low   High  Volume
MY PALM OIL       JUN9         0   +0.00  0 0 0
MY PALM OIL       JUL9      2005  -13.00    2003   2016     457
MY PALM OIL       AUG9      2016  -12.00    2013   2031    3573
CHINA PALM OLEIN  SEP9      4402   +2.00    4362   4412  207974
CHINA SOYOIL      SEP9      5466  +20.00    5434   5474  162710
CBOT SOY OIL      JUL9     27.33   -0.05   27.29  27.47    4531
INDIA PALM OIL    JUN9    505.50   -1.00  503.60  505.6     122
INDIA SOYOIL      JUN9       743   -0.85   742.4  746.2    1200
NYMEX CRUDE       JUL9     54.34   +0.35   53.99  54.84   56275

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel

(US$1 = RM4.1620)
(US$1 = 69.4450 Indian rupees)
(US$1 = 6.9335 Chinese yuan)