RTRS:VEGOILS-Palm edges down on ECB, posts 4th straight weekly loss
* Investor caution dominates on ECB inaction
* Futures post 4th straight weekly loss
* Palm oil still targets 2,880 ringgit -technicals
(Updates prices)
By Chew Yee Kiat
SINGAPORE, Aug 3 (Reuters) - Malaysian crude palm oil inched
lower on Friday, posting a fourth straight weekly loss as
investors remained cautious after the European Central Bank
failed to come up with an immediate measure to tackle the euro
zone's fiscal crisis.
The central bank indicated on Thursday that it may again
start buying government bonds to reduce crippling Spanish and
Italian borrowing costs but the conditions it set and the
dissenting voice of its key German member disappointed markets.
The market is also anticipating higher palm oil stocks in
July for No.2 producer Malaysia due to weaker exports and higher
production output, and that is weighing on futures prices.
"Right now, you have weather on one hand, and macroeconomic
fears on the other," said a trader with a foreign commodities
brokerage in Malaysia, referring to the persistent U.S. drought
weather that had squeezed global oilseed supplies.
"It also looks like stocks are going to break above the
2-million-tonne mark."
The benchmark October palm oil futures on the Bursa
Malaysia Derivatives Exchange ended 1 percent lower at 2,918
ringgit ($934) per tonne.
Prices have lost 0.3 percent for the week after posting
losses for three consecutive weeks.
Traded volumes stood at 13,937 lots of 25 tonnes each, much
lower than the usual 25,000 lots.
Technicals are bearish as palm oil's target at 2,880 ringgit
remains intact, Reuters market analyst Wang Tao said.
Weather concerns remain after the U.S. Department of
Agriculture downgraded soybean crop condition at
good-to-excellent by 2 percentage points earlier this week.
A drop in soybean oil supply could shift more vegetable oil
demand to the cheaper palm oil, which is trading at a hefty
discount of above $200 a tonne.
Traders are also looking out for weather concerns closer to
Southeast Asia, as the El Nino's dry weather pattern may return
by end of the year and could hurt production for top palm oil
producers Indonesia and Malaysia.
Malaysian palm oil exports fell in July from a month ago,
reflecting slowing demand from top food buyers China and India,
according to cargo surveyors Intertek Testing Services and
Societe Generale de Surveillance.
Market players expect slowing exports to lead to higher
stocks for July as industry regulator Malaysian Palm Oil Board
releases official data on July 10.
Brent crude oil reached $107 a barrel on Friday, as
investors awaited key U.S. jobs data that could bolster hopes
that the Federal Reserve may do more to stimulate the economy.
In other vegetable oil markets, the most active U.S. soyoil
contract for December delivery had gained 0.3 percent by
1005 GMT. The most active January 2013 soyoil contract
on the Dalian Commodity Exchange closed 0.1 percent higher.
Palm and soy oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG2 2910 +0.00 2905 2916 23
MY PALM OIL SEP2 2907 -13.00 2907 2936 578
MY PALM OIL OCT2 2918 -28.00 2913 2950 11349
CHINA PALM OLEIN JAN3 7750 +6.00 7698 7780 194452
CHINA SOYOIL JAN3 9490 +12.00 9432 9516 369254
CBOT SOY OIL DEC2 52.49 +0.13 52.22 52.88 5870
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
