Palm oil futures edge down, exports cap losses

KUALA LUMPUR: Malaysian palm oil futures fell on Thursday as fresh
signs emerged of an economic slowdown in China, the world's second
biggest edible oils buyer, while news of better-than-expected soy
yields in the United States continued to drag down prices. Inventory
levels that could surpass 2.2 million tonnes in September threatened to
offset strong exports. Cargo surveyor Intertek Testing said export
shipments rose almost 15 percent during Sept. 1-20 over the same period
a month ago. Futures traded in a tight range between 2,841 and 2,871
ringgit, as investor sentiment remained bearish. Prices fell to a
one-week low on Tuesday, tracking soybeans lower on expectations for
crop yields across the drought-stricken U.S. Midwest to exceed
forecasts. Also weighing on prices was data that showed manufacturing
in China contracted for the 11th month in a row in September,
indicating the world's second largest economy remains on track for a
seventh quarter of slowing growth. "The market is trying to hold. It's
very difficult for the market to go up because the cash market is quite
weak," said a trader with a foreign commodities brokerage in Malaysia.
"Compared
to last month, exports should be better. But the major thing is the
stocks have to go down for the market to move higher," the trader said.
Another cargo surveyor, Societe Generale de Surveillance, will issue
export data later in the day. By the midday break, the benchmark
December contract on the Bursa Malaysia Derivatives Exchange was down
0.2 percent at 2,854 ($930) per tonne. Total traded volume stood at
13,710 lots of 25 tonnes each, slightly higher than the usual 12,500
tonnes.
In a bearish sign for palm oil, Brent crude eased below
$108 a barrel on Thursday after the China data weakened sentiment
further in a market already reeling from Saudi Arabia's pledge to keep
global crude oil prices low. In other vegetable oil markets, U.S.
soyoil for December delivery dropped 0.6 percent. The most active
January 2013 soyoil contract on the Dalian Commodity Exchange rose 0.3
percent by the midday break. - Reuters