September 11, 2013 / 10:28 AM / 4 years ago

VEGOILS-Palm oil drops to 3-week low on output rise worries

* Sept stocks may edge higher on rising output -trader
    * Malaysia Aug stocks up 0.1 pct on month at 1.67 mln T
-MPOB
    * Palm oil to rebound to 2,385 ringgit -technicals

 (Updates prices, releads)
    By Chew Yee Kiat
    SINGAPORE, Sept 11 (Reuters) - Malaysian palm oil futures
fell on Wednesday to the lowest in three weeks, weighed down by
concerns of rising production pushing stocks higher this month.
    But losses were capped by some bargain-hunting in the
morning session, while encouraging export figures and official
data pointing to a lower-than-expected increase in August
inventory level also provided some support.
    "We see a slight reversal (in the morning session) today
after yesterday's loss. But there are still concerns about
stronger production ... and if demand cannot keep up with it,
then stocks may climb again this month," said a trader with a
foreign commodities brokerage in Kuala Lumpur.     
    On Wednesday, the benchmark November contract on
the Bursa Malaysia Derivatives Exchange lost 0.9 percent to
close at 2,330 ringgit ($715) per tonne, its lowest level since 
Aug. 22.    
    Total traded volumes were thin at 26,753 lots of 25 tonnes
each, compared to the average 35,000 lots.
    Technicals showed palm oil may rebound to 2,385 ringgit per
tonne before falling again, according to Reuters market analyst
Wang Tao.     
    Malaysia's palm oil end-stocks in August inched up 0.1
percent from a month ago to 1.67 million tonnes, with exports
registering a 7.4 percent growth to 1.52 million tonnes,
industry regulator Malaysian Palm Oil Board said on Tuesday.
    
    "Overall, we reckon the news is positive to crude palm oil
prices as the good demand growth month-on-month so far has been
able to absorb the additional supply," Alam Lim Seong Chun,
analyst with Malaysia's Kenanga Investment Bank, said in a note
to clients.
    Export demand continued to remain resilient in the first 10
days of September, with shipments rising 10.8 percent and 6.8
percent from the same period a month ago, according to cargo
surveyors Intertek Testing Services and Societe Generale de
Surveillance, respectively.  
    In other markets, Brent crude rose above $112 a barrel on
Wednesday, after falling more than 4 percent in the past two
days as concerns eased regarding an imminent strike against
Syria.    
    In vegetable oil markets, the U.S. soyoil contract for
December was almost flat in late Asian trade. The
most-active January soybean oil contract on the Dalian
Commodities Exchange gained 0.4 percent.       
  Palm, soy and crude oil prices at 1004 GMT
                                                                                     
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      SEP3       0    +0.00       0       0       0
  MY PALM OIL      OCT3    2342   -12.00    2336    2366    1310
  MY PALM OIL      NOV3    2330   -21.00    2330    2367   13098
  CHINA PALM OLEIN JAN4    5524    +8.00    5488    5528  338610
  CHINA SOYOIL     JAN4    7236   +30.00    7186    7238  573098
  CBOT SOY OIL     DEC3   43.08    +0.02   42.95   43.30    5706
  NYMEX CRUDE      OCT3  107.67    +0.28  106.53  108.00   23580
                                                                                     
  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=3.259 Malaysian ringgit)

 (Editing by Muralikumar Anantharaman)

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