September 26, 2012 / 5:46 AM / 5 years ago

VEGOILS-Palm oil falls on rising stocks, economic fears

* Rising stocks weigh on futures, trading over 17 pct lower
this year
    * Investors watching Spain's financing woes
    * Palm oil technicals look bearish for next three months

 (Updates prices)
    By Chew Yee Kiat
    SINGAPORE, Sept 26 (Reuters) - Malaysian palm oil futures
ended lower on Wednesday, as investors stayed cautious on rising
stocks and renewed fears about a slowing global economy on
Spain's financing woes.
    Palm oil stocks in No.2 producer Malaysia look set to climb
higher on strong production, and while exports rose from a month
ago, traders said the increase was not enough to bring down high
inventory levels, which hit a 10-month high in August.
    Malaysian palm oil exports rose 11 percent for the first 25
days of September from a month ago, cargo surveyor data showed
on Tuesday.  
    "The export numbers are a non-factor now -- the first 25
days is not that fantastic. We need bigger exports coming in to
reduce stocks," said a trader with a foreign commodities
brokerage in Malaysia.
    "I believe stocks cannot be reduced in one or two months'
time, it will take longer, probably until the end of the year,
to be reduced further, then it will help to suppress the drop in
prices."
    The benchmark December contract on the Bursa
Malaysia Derivatives Exchange lost 1.8 percent to close at 2,621
ringgit ($851) per tonne.
    Futures hit a two-year low on Monday and have lost more than
17 percent so far this year, on track for their worst yearly
performance since 2008. 
    Total traded volumes stood at 34,447 lots of 25 tonnes each,
higher than the usual 25,000 lots.
    Technicals showed that over the next three months, palm oil
would drop into a support zone of 2,387 to 2,415 ringgit per
tonne, a break below which will open the way towards a range of
1,899 to 1,952 ringgit, said Reuters analyst Wang Tao.
 
    Cautious sentiment dominates as the markets are closely
watching Madrid's ability to control its finances, with
ballooning regional debts crippling the government's refinancing
efforts.
    The country is also subject to a ratings review by Moody's
Investors Service.     
    Also weighing on palm oil, Brent crude oil fell below $110
on Wednesday, weighed down by a stronger dollar, worries over
growth and the euro zone debt crisis as Greece faced its biggest
anti-austerity strike for months. 
    In other vegetable oil markets, U.S. soyoil for December
delivery lost 1.4 percent in late Asian trade. The most
active January 2013 soyoil contract on the Dalian
Commodity Exchange also edged down 1.8 percent after touching
its lowest level since July 27.    
    
  Palm, soy and crude oil prices at 1008 GMT
                                                                             
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      OCT2    2480   -59.00    2465    2482     344
  MY PALM OIL      NOV2    2545   -60.00    2537    2572    3170
  MY PALM OIL      DEC2    2621   -48.00    2603    2642   16758
  CHINA PALM OLEIN JAN3    7230   -54.00    7222    7318  388272
  CHINA SOYOIL     JAN3    9348  -174.00    9348    9490  652402
  CBOT SOY OIL     DEC2   52.74    -0.79   52.72   53.69   10318
  NYMEX CRUDE      NOV2   90.72    -0.65   90.33   91.34   23628
                                                                             
  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
 


 (Additional reporting by Anuradha Raghu; Editing by Niluksi
Koswanage)
 (chew.yeekiat@thomsonreuters.com; +65 68703925; Reuters
Messaging: chew.yeekiat.thomsonreuters.com@thomsonreuters.net)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below