RTRS:VEGOILS-Palm oil ends lower on U.S. wet weather forecast
* Weather forecasts show rain in U.S. Midwest over weekend
* Palm oil to drop to 2,919 ringgit -technicals
* USDA cuts soybean yields, supportive for palm oil
* Traders looking out for El Nino returning to Asia
(Updates prices)
By Chew Yee Kiat
SINGAPORE, July 12 (Reuters) - Malaysian crude palm oil
futures tumbled on Thursday, as traders took profit, prompted
partly by a forecast for rain over the weekend in the
drought-hit, soy-producing U.S. Midwest that could ease concerns
of tight oilseed supply.
Lower Malaysian palm oil exports for the first 10 days of
July also fuelled some of the declines, as the market had
largely priced in lower ending stocks in June and strong Asian
festival demand for the past few weeks.
"All the bullish factors have already been laid on the
table, so traders just have to take profit and decide on what to
do next," said a trader with a foreign commodities brokerage in
Malaysia.
"The rain in a way helped ease the market because it was on
a bullish weather run. But if the rain doesn't materialise,
traders will put their money back into the market."
Benchmark September palm oil futures on the Bursa
Malaysia Derivatives Exchange lost 2.3 percent to close at 3,012
ringgit ($944) per tonne.
Traded volumes stood at 45,851 lots of 25 tonnes each, much
higher than the usual 25,000 lots.
Technicals were bearish as palm oil is expected to drop to a
support at 2,970 ringgit, a break below which will open the way
towards 2,919 ringgit, said Reuters market analyst Wang Tao.
The weather is expected to turn wetter for parts of the U.S.
Midwest, Commodity Weather Group said in a note to clients on
Wednesday, offering some relief on the tight global oilseed
supply situation.
But the U.S. Department of Agriculture (USDA) cut soybean
yields due to the persistent drought and analysts said that
could be supportive for palm oil prices.
Market players are also on the lookout for the possibility
of El Nino returning to the region as dry weather could cut palm
oil output, further eating into 14-month-low palm oil stocks in
June.
While cargo surveyors said Malaysia's palm oil exports fell
sharply from July 1 to 10, the market was expecting more orders
to come in as the Asian festival season gets underway with China
and India celebrating key holidays from September to November.
Oil prices fell below $100 per barrel on Thursday,
retreating after a 2 percent rally the previous session, as the
International Energy Agency said a slowdown could cap prices
while investors waited for China's GDP data due on Friday.
In other vegetable oil markets, the most active U.S. soyoil
for December delivery lost 0.8 percent. The most active
January 2013 soyoil contract on the Dalian Commodity
Exchange also fell 2.3 percent.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL2 3010 -43.00 3005 3010 27
MY PALM OIL AUG2 3013 -56.00 2987 3030 1927
MY PALM OIL SEP2 3012 -70.00 2995 3041 29854
CHINA PALM OLEIN JAN3 7998 -184.00 7984 8114 295556
CHINA SOYOIL JAN3 9570 -216.00 9570 9700 556014
CBOT SOY OIL DEC2 54.22 -0.44 54.00 54.90 8358
NYMEX CRUDE AUG2 84.95 -0.86 84.81 86.20 26008
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
Crude in U.S. dollars per barrel
