KUALA LUMPUR: Malaysian palm oil futures slid to fresh lows in early trade on Monday, hitting their lowest in five and a half months, as traders were cautious ahead of official data from the Malaysian Palm Oil Board (MPOB) scheduled for release on Tuesday.
Palm oil stockpiles in Malaysia, the world’s second-largest producer after Indonesia, are seen rising in November as export volumes fall faster than output, weighing on prices.
A Reuters poll forecast that inventories at end-November will rise 11.4 percent to 2.44 million tonnes on-month, its highest levels in about two years, while output is pegged to drop 3 percent to 1.95 million tonnes.
Exports are forecast to fall 6 percent from October to 1.45 million tonnes in November.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 0.5 percent to 2,467 ringgit ($604.66) a tonne at the midday break, in line for a sixth day of declines.
It earlier fell to 2,465 ringgit, its lowest since June 29.
Trading volumes at the midday break stood at 14,974 lots of 25 tonnes each.
“Palm oil futures are trading cautiously ahead of November supply and demand data from MPOB,” said a futures trader from Malaysia, adding expectations of a decline in exports for the first 10 days of December also contributed to falling prices.
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance are scheduled to release Dec. 1-10 export data for Malaysian palm oil shipments on Monday afternoon.
Palm oil may fall to 2,462 ringgit per tonne, a break below which could cause a loss to 2,426 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related oils, the January soybean oil contract on the Chicago Board of Trade was down 0.6 percent, while the January soybean oil contract on the Dalian Commodity Exchange was slightly down 0.1 percent.
The Dalian January palm olein contract also dipped 0.2 percent.
Palm oil prices are affected by other edible oils as they compete for a share in the global vegetable oils market.
Source: Brecorder.com
