* Prices touch 2,026 ringgit, the lowest since Sept. 11
* Palm may fall into 1,997-2,031 ringgit range-technicals
By Michael Taylor
JAKARTA, Aug 4 (Reuters) – Malaysian palm oil futures reversed initial gains
to hit an 11-month low on Tuesday due to technical selling and as prices tracked
other vegetable oils lower due to concerns over demand.
By the midday break, the benchmark palm oil contract for October
on the Bursa Malaysia Derivatives Exchange had fallen 1.2 percent to 2,029
ringgit ($ 526) a tonne.
Prices earlier fell to 2,026 ringgit, their lowest since Sept. 11, and have
lost 4 percent so far this month. Traded volume stood at 21,977 lots of 25
tonnes each, well above the roughly 13,500 lots usually traded by midday.
“Our market opened higher but there was no follow-through,” said a trader
with a foreign commodities brokerage in Kuala Lumpur. “Technical charting looks
bearish. Everything from soft commodities to precious metals and grains — is
weak.”
Uncertain demand outlook, exacerbated by economic worries and top buyer
China, overshadowed any upside from the impact of dry weather spurred by El
Nino, traders said.
Asian shares struggled to stay positive after downbeat economic data
pressured Wall Street ahead of a key U.S. jobs report that could provide
important clues to the timing of the Federal Reserve’s interest rate increase.
“The sell-off is exacerbated by lower grains and negative news about China’s
manufacturing sector,” said a second palm trader. “August weather and production
look excellent and street sentiment is pointing lower (market) until demand and
grains stabilise.”
In other vegetable oils, the U.S. August soyoil contract eased 0.5
percent in early Asian trade, while the most active soybean oil contract
on the Dalian Commodity Exchange slipped 0.2 percent.
Palm may fall into a range of 1,997-2,031 ringgit, said Reuters market
analyst Wang Tao.
Crude oil edged up following a sharp 5 percent drop in the previous session,
as high global production and a weakening economic outlook, especially in Asia,
prompted analysts to warn of further falls.
Palm oil, used as cooking oil and to make a range of foodstuffs from instant
noodles to margarines, as well as an additive in biodiesel, typically tracks
soyoil which is a common food and fuel substitute.
Palm, soy and crude oil prices at 0524 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG5 2039 -17.00 2039 2040 2
MY PALM OIL SEP5 2028 -28.00 2025 2074 1473
MY PALM OIL OCT5 2029 -25.00 2026 2073 9692
CHINA PALM OLEIN JAN6 4652 -48.00 4596 4666 530128
CHINA SOYOIL JAN6 5428 -12.00 5364 5446 373146
CBOT SOY OIL DEC5 30.16 -3.50 30.11 30.38 2680
INDIA PALM OIL AUG5 404.80 -3.50 404.50 409.00 238
INDIA SOYOIL AUG5 567.25 -1.20 565.60 568.50 6590
NYMEX CRUDE SEP5 45.49 +0.32 45.29 45.58 9557
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($ 1 = 3.8610 ringgit)
(Editing by Subhranshu Sahu)
