RTRS:VEGOILS-Palm oil hits 3-week low on slow exports, higher output
* Exports down by more than a fifth, production to rise in
July
* U.S. dry weather damage still in focus
* Palm oil to fall to 2,973 ringgit -technicals
(Updates prices)
By Chew Yee Kiat
SINGAPORE, July 18 (Reuters) - Malaysian crude palm oil
futures slid to a near three-week low on Wednesday, as traders
booked profits partly on weaker exports and better production
outlook in Malaysia after a recent U.S. weather-fuelled rally.
Malaysia's July 1-15 palm oil exports tumbled more than 20
percent from a month ago at a time when stronger production is
expected for the month. Slower exports and higher output could
see palm oil stocks climb again after falling to a 14-month low
in June.
But some traders kept a bullish outlook as the U.S. drought
that damaged soybean crops could still shift demand to refined
palm oil that is trading at a discount of above $200 to soyoil.
"I think the market just doesn't have enough push to go up
further at the moment," said a Singapore-based trader with a
commodities house.
The benchmark October palm oil futures on the Bursa
Malaysia Derivatives Exchange fell 2.2 percent to close at 2,994
ringgit ($947) per tonne, after going as low as 2,990 ringgit --
a level unseen since June 28.
Traded volumes were high at 39,170 lots of 25 tonnes each,
compared to the usual 25,000 lots.
Technicals remain bearish as palm oil will extend its
Tuesday loss to 2,973 ringgit, said Reuters market analyst Wang
Tao, based on a wave analysis.
Cargo surveyor Intertek Testing Services reported a 21
percent decline in Malaysian exports for July 1-15. Another
cargo surveyor, Societe Generale de Surveillance, posted a 26.1
percent drop in exports for the same period.
Global traders are watching the weather damage on U.S. crops
as the worst drought since 1956 could trigger a serious shortage
of oilseeds and vegetable oils, boosting prices and stirring
food-driven inflation.
The U.S. Department of Agriculture rated soybean crop at 34
percent good-to-excellent in a Monday report, down 6 percentage
points from the previous week.
There is also the possibility of an El Nino weather pattern
returning to Southeast Asia at the end of the year, bringing
drought and crimping palm oil production.
Although climate indicators for an El Nino event in the
western Pacific have eased slightly in the past fortnight,
meteorologists still expect the weather pattern to form late in
2012.
Oil retreated slightly on Wednesday, snapping five days of
gains as U.S. Federal Reserve Chairman Ben Bernanke offered few
signs of further monetary stimulus and a gloomy view of the
economy of the world's top oil consumer.
Other vegetable oil markets also traded lower. By 1007 GMT,
the most active U.S. soyoil for December delivery fell
0.7 percent and the most active January 2013 soyoil contract
on the Dalian Commodity Exchange lost 1 percent.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG2 2970 -72.00 2970 3040 923
MY PALM OIL SEP2 2982 -74.00 2982 3058 6314
MY PALM OIL OCT2 2994 -68.00 2990 3067 24933
CHINA PALM OLEIN JAN3 8038 -146.00 8004 8186 323388
CHINA SOYOIL JAN3 9744 -96.00 9702 9858 553480
CBOT SOY OIL DEC2 54.60 -0.39 54.53 55.19 8889
NYMEX CRUDE AUG2 88.80 -0.42 88.59 89.23 20182
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
