VEGOILS-Palm oil falls to 1-mth low on stocks, USDA in focus

SINGAPORE: Malaysian crude palm oil futures slipped on Tuesday to
their lowest in nearly a month, as traders turned cautious about high
stocks and ahead of key reports by the U.S. Department of Agriculture
(USDA) due this week. The Malaysian Palm Oil Board (MPOB) reported
August stocks at a 10-month high of 2.1 million tonnes, erasing some
gains in palm oil futures that are trading 8 percent lower this year.
Traders also avoided taking risky positions ahead of the USDA's monthly
supply-demand and crop production reports on Wednesday that could give
insight into the extent of drought damage to soybean crops. "Today's
selloff is purely technical," said a trader with a foreign commodities
brokerage in Malaysia. "Basically we saw long liquidation coming in
early in the morning. After the market broke below 2,900 ringgit,
further selling came in." The benchmark November contract on the Bursa
Malaysia Derivatives Exchange slipped 0.6 percent to close at 2,919
ringgit ($945) per tonne. Prices had earlier fallen to 2,874 ringgit,
the lowest level since Aug. 15. Total traded volume stood at 52,583
lots of 25 tonnes each, more than double the usual 25,000 lots.
Technicals
will remain neutral until palm oil falls out of the range of 2,895 to
2,943 ringgit, said Reuters market analyst Wang Tao, adding that a drop
below 2,895 ringgit would extend to 2,867 ringgit. Demand strengthened
as Malaysia's palm oil exports rose as much as 30 percent for the Sept.
1-10 period from a month ago, cargo surveyor data showed on Monday.
"Though the latest data shows optimism on the export side on the back
of higher tax-free crude palm oil quota, a growing concern is on the
stockholding level, which has now spiralled to more than 2 million
tonnes," Malaysia-based TA Securities said in a note to clients. "This
would adversely impact the price of crude palm oil moving forward. To
aggravate further, Indonesia's stock level appears to be higher than
consensus expectations." In a bullish sign for palm oil, oil rose above
$115 a barrel on Tuesday, lifted by expectations the U.S. Federal
Reserve would unveil further steps to stimulate its economy this week.
In other vegetable oil markets, U.S. soyoil for December delivery fell
0.2 percent by 1004 GMT. The most active January 2013 soyoil contract
on the Dalian Commodity Exchange closed 0.5 percent lower. - Reuter