RTRS:VEGOILS-Lower markets, rising stocks drag on palm oil
* USDA cuts soybean output, but downgrade factored in
* Palm oil to retest support at 2,838 ringgit -technicals
* Coming up: Malaysia Aug 1-15 export data on Wednesday
(Updates prices, adds details)
By Chew Yee Kiat
SINGAPORE, Aug 13 (Reuters) - Malaysian crude palm oil
futures eased on Monday, mirroring losses in the soybean oil
market where traders booked profits from a drought-driven rally
and as rising local stocks weighed on sentiment.
The monthly supply and demand report by the U.S. Department
of Agriculture (USDA) forecast a lower soybean output on late
Friday, which is slightly bullish for palm oil, but traders said
the downgrade had been factored in.
The market continued to price in improving production and a
lacklustre demand that pushed Malaysia's palm oil inventory
level to a five-month high of nearly two million tonnes in July.
"On the supply side, we notice signs of waning tree stress
as production increased," Alan Lim Seong Chun, research analyst
with Malaysia's Kenanga Investment Bank, said in a note to
clients.
"On the demand side, demand growth was lower in all key
crude palm oil consumer countries except Europe."
By the midday break, the benchmark October palm oil futures
on the Bursa Malaysia Derivatives Exchange had lost 0.7
percent to 2,882 ringgit ($919) per tonne.
Palm oil ended the previous week with a 1.2 percent loss,
the fifth consecutive week that the edible oil is in the red.
Total traded volumes stood at 12,470 lots of 25 tonnes each,
just slightly lower than the usual 12,500 lots.
On the technicals front, palm oil will retest a support at
2,838 ringgt, a break below which will trigger a fall to 2,760
ringgit, Reuters market analyst Wang Tao said.
Malaysian palm oil stocks in July touched their highest
since February at close to two million tonnes, almost in line
with market expectations, industry regulator the Malaysian Palm
Oil Board said on Friday.
And the build up in stocks could continue as exports of the
edible oil hovered around the 350,000-tonne level compared to
the 363,975 tonnes reported by cargo surveyor Intertek Testing
Services a month ago.
Traders are hoping that the recently announced tax-free
crude palm oil export quotas of 2 million tonnes could help
bolster demand and reduce stocks in coming months.
Market players will be looking out for the next export data
due on Wednesday for further clues on consumption trends.
Brent crude rose above $114 per barrel to a more than
three-month high on Monday on renewed fears of supply disruption
as Israel's latest comments on stopping Iran from proceeding
with a disputed nuclear programme stoked tension in the region.
In other vegetable markets, by 0540 GMT, the most active
U.S. soyoil contract for December delivery had lost 0.8
percent and the most active January 2013 soyoil contract
on the Dalian Commodity Exchange had gained 0.7 percent.
Palm, soy and crude oil prices at 0540 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG2 2890 +60.00 2850 2890 2
MY PALM OIL SEP2 2820 -23.00 2810 2851 353
MY PALM OIL OCT2 2863 -19.00 2847 2903 7483
CHINA PALM OLEIN JAN3 7772 -12.00 7754 7824 194374
CHINA SOYOIL JAN3 9748 +62.00 9708 9788 463210
CBOT SOY OIL DEC2 54.01 -0.41 53.82 54.50 7446
NYMEX CRUDE SEP2 93.32 +0.45 93.11 93.74 7027
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
