Palm Oil edges lower, but firm exports cap losses

by **Cals** Thu 05 Sep 2013, 01:19

Palm Oil edges lower, but firm exports cap losses
Business & Markets 2013
Written by Reuters
Wednesday, 04 September 2013 19:40

* Soybean condition deteriorates in line with expectations
* Palm oil may fall to 2,352 ringgit - technicals
* Ringgit eases slightly after previous day's 3-week high

SINGAPORE (Sept 4): Malaysian palm oil futures edged lower on Wednesday, tracking the U.S. soy market that dropped after a U.S. Department of Agriculture report showed yields were not worse than expected.

Palm oil tracks soy prices as it is a substitute for soybean oil. But losses in the tropical oil were curbed by data showing August exports from Malaysia rose as much as 7.6 percent from a month earlier, helped by higher purchases from Europe and China.

Investors are now waiting for the Sept. 1-10 exports number and official data from the Malaysian Palm Oil Board (MPOB) on August stocks and output, due next week, for more trading cues.

"Palm oil prices are undergoing the consolidation phase with prices hovering around the 2,400 ringgit level. Investors are likely to seek for more confirmations and directions pending the release of the MPOB official data," said Singapore-based Phillip Futures in a note on Wednesday.

The benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.7 percent to close at 2,399 ringgit ($731) per tonne, after trading in a range of 2,392-2,417 ringgit.

Total traded volumes were thin at 15,778 lots of 25 tonnes each, compared with the usual 35,000 lots.

Technicals showed palm oil may drop to 2,352 ringgit per tonne as it has pierced below support at 2,403 ringgit, according to Reuters market analyst Wang Tao.

Traders are also closely watching the ringgit, which eased slightly on Wednesday from the previous day's three-week high. A higher ringgit makes crude palm oil more expensive for overseas refiners.

In other markets, Brent crude held above $115 a barrel on Wednesday as U.S. lawmakers' support for military action against Syria revived concerns that Middle East oil supplies might be disrupted if the conflict widens.

Chicago soybeans fell 1.4 percent, coming under pressure after the USDA rated 54 percent of U.S. crop was in good to excellent condition, down 4 percentage points from the previous week but in line with market expectations.

In vegetable oil markets, the U.S. soyoil contract for December fell 0.5 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange dropped 1.2 percent.

Palm, soy and crude oil prices at 1004 GMT

Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	SEP3	2390	-30.00	2390	2399	65
MY PALM OIL	OCT3	2402	-17.00	2395	2419	678
MY PALM OIL	NOV3	2399	-18.00	2392	2417	9681
CHINA PALM OLEIN	JAN4	5584	-32.00	5550	5604	414388
CHINA SOYOIL	JAN4	7188	-90.00	7166	7240	765076
CBOT SOY OIL	DEC3	43.95	-0.24	43.71	44.26	5390
NYMEX CRUDE	OCT3	107.70	-0.84	107.65	108.61	18559

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
($1=3.28 Malaysian ringgit)