RTRS:VEGOILS-Palm oil at near two-week low on economic concerns
* Prices hit lowest since Aug. 26
* Markets looking out for production, export trends
* Traders fear euro zone debt crisis may hurt commodity
demand
(Adds details, comments)
By Niluksi Koswanage
KUALA LUMPUR, Sept 6 (Reuters) - Malaysian palm oil futures
fell to their lowest in almost two weeks on Tuesday as investors
fretted over the worsening euro zone debt crisis that could put
the brakes on economic growth and commodity demand.
In the past few weeks, the palm oil market has been
supported by solid export demand in August and prospects of a
stock draw in No.2 palm oil producer Malaysia.
"After a few months of strong exports, we expect the buying
trend to slow a little. And of course, all eyes are on the debt
crisis in Europe and the U.S. as this could slow economic
growth," said a trader with a foreign commodities brokerage.
The benchmark November crude palm oil contract FCPOc3
dropped as much as 1.3 percent to 2,978 Malaysian ringgit -- a
level unseen since Aug. 26. By midday, the contract was trading
at 2,994 ringgit per tonne.
Traded volumes were still thin at 8,234 lots at 25 tonnes
each versus the usual 12,500 lots as some traders had taken
extended leave after the Eid festival last week.
Technicals turned negative with Reuters analyst Wang Tao
saying a bearish target at 2,887 ringgit has been established
for palm oil as a medium-term downtrend that started from the
June 3 high of 3,465 ringgit per tonne remains intact.
Palm oil exports for August dipped by a slight 0.5 percent
from a month ago, indicating strong demand. Traders said this
could cut into high stocks given lower production last month as
estate workers took leave for the Eid holidays marking the end
of the fasting month of Ramadan.
September exports are expected to slip further as importers
like India and China wait for prices to come under pressure
before committing to purchases, traders said.
Brent crude rose towards $111 a barrel on Tuesday,
rebounding from sharp falls a day earlier, as expectations for
further economic stimulus in the U.S. boosted sentiment.
Vegetable oil markets were still pricing in concerns over a
global economic slowdown although worries that hot and dry
conditions in the U.S. Midwest could hurt corn and soy yields
supported prices to some extent.
U.S. soyoil for September delivery dropped 1.1
percent in Asian trade. The most active May 2012 soy oil
on China's Dalian Commodity Exchange lost 1.6 percent.
Palm, soy and crude oil prices at 0535 GMT
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil in Chinese yuan per tonne
Crude in U.S. dollars per barrel
(Editing by Himani Sarkar)
((niki.koswanage@thomsonreuters.com)(+603 2333 8035)(Reuters
Messaging:)(niki.koswanage.thomsonreuters.com@thomsonreuters.net
