Vegoils Palm oil falls ahead of key industry stocks report

by **Cals** Tue 09 Jun 2015, 21:46

Vegoils
Palm oil falls ahead of key industry stocks report

KUALA LUMPUR (June 9): Malaysian palm oil futures inched down on Tuesday as investors booked profits ahead of key industry data on monthly inventories and output in the No.2 producer, with prices facing pressure as the ringgit clawed back gains from nine-year lows.
After hitting its lowest since January 2006 on Monday, the ringgit nudged up 0.5 pct to 3.7470 per U.S. dollar, pulling the plug on palm's rally that had lifted benchmark prices to their highest in over three months.
"When the market rallied up, one of the main things behind it was the ringgit," said a trader with a local commodities brokerage.
Some market players are also squaring positions ahead of an upcoming monthly report on Malaysia's palm end-stocks, output and exports by industry regulator the Malaysian Palm Oil Board due Wednesday.
"There is profit-taking ahead of the MPOB report tomorrow ... people are squaring positions," the Malaysia-based trader added.
Market estimates show that Malaysian palm oil stocks likely eased to 2.14 million tonnes in May, with exports of the tropical oil surging nearly 40 percent in their biggest monthly rise in 8-1/2 years.
The Malaysisan Palm Oil Association, a growers' group, estimates that output for the month rose 5.3 percent to 1.78 million tonnes.
The August palm oil contract on the Bursa Malaysia Derivatives exchange had lost 0.7 percent to 2,317 ringgit ($618.36) a tonne by Tuesday's close, falling off a three-month peak of 2,362 ringgit hit in the previous session.
Total traded volume stood at 44,541 lots of 25 tonnes each, higher than the usual 35,000 lots.
Meanwhile, Indonesia's finance minister Bambang Brodjonegoro said the public service agency to collect and manage crude palm oil levies can be set up after regulations are finalised this week, propelling the top palm producer a step closer to funding an ambitious biodiesel programme.
"The levy will be implemented after the BLU (Public Service Agency) is established and board of directors is chosen," he said in Jakarta late Monday.
Neighbouring Malaysia plans to raise its biodiesel mandate to 10 percent by October this year from 7 percent currently, its plantation industries and commodities minister said on Monday.
Oil prices gained on Tuesday, recouping some of the previous session's losses, as higher seasonal demand in developed economies offset the impact of a large global supply overhang.
In other markets, the U.S. July soyoil contract was flat in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange fell 1.4 percent.