SINGAPORE: Malaysian palm oil lost more ground on Wednesday, falling for a sixth consecutive session to its lowest since October 2009 as slowing exports and prospects of near-record U.S. soybean production weighed on the market.
Exports of Malaysian palm oil products for Aug. 1-20 fell 5.39 percent to 822,026 tonnes from the 868,843 tonnes shipped during July 1-20, cargo surveyor Intertek Testing Services said.
According to cargo surveyor Societe Generale de Surveillance (SGS), palm oil product exports over the same period fell 8.3 percent.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,049 ringgit per tonne by Wednesday's close.
Traded volume stood at 36,920 lots of 25 tonnes, slightly above the daily average of 35,000 lots.
"It is all the negative news which is pulling prices lower," said one Kuala Lumpur-based trader. "Exports are down and global commodity prices are under pressure."
Chicago soybeans dipped for a second session as a closely watched crop tour reported near-record yields in key U.S. oilseed-producing states.
The U.S. Department of Agriculture in a report on Monday rated the soybean crop condition as 71 percent good-to-excellent, up from 70 percent a week earlier.
The downtrend in palm prices would likely continue "until all the negative newsflows are over," CIMB Investment Bank plantations analyst Ivy Ng said, adding that reports of weak palm exports, weakening soybean prices and crude prices had all hit palm prices. "Palm is just dragged along with that."
Any recovery from the downturn would probably be subdued during the peak-production season, Ng said, adding that this would last until around mid-November.
"Currently, the bargaining power is with the buyers because they see crops are coming out and they think they can afford to wait a bit and still get good prices," Ng said.
"Nobody is going to buy and hold because it's very costly to hold onto this commodity."
Malaysian palm oil production is likely to rise in the months ahead as trees enter their peak production period, adding to rising global supplies of edible oils.
On the technical front, palm oil is expected to decline further to the 323.6 percent level, or 2,016 ringgit per tonne, having fallen through support at 2,046 ringgit, according to Reuters market analyst Wang Tao.
The most active January soybean oil contract on the Dalian Commodities Exchange slipped 0.5 percent while the U.S. soyoil contract for December gave up 0.4 percent.
Brent crude oil edged higher towards $102 a barrel on Wednesday, after slumping to a 14-month low in the previous session, as growing output from Iraq and Libya kept the market well supplied, despite violence in the countries.
Palm, soy and crude oil prices at 1017 GMT Contract Month Last Change Low High Volume MY PALM OIL SEP4 2052 -22.00 2051 2078 562 MY PALM OIL OCT4 2042 -23.00 2038 2071 6283 MY PALM OIL NOV4 2049 -19.00 2045 2075 13248 CHINA PALM OLEIN JAN5 5252 -50.00 5236 5286 542058 CHINA SOYOIL JAN5 5980 -28.00 5950 5998 354290 CBOT SOY OIL DEC4 32.85 -0.16 32.83 33.17 7170 NYMEX CRUDE SEP4 95.57 +1.09 94.70 96.25 1226 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
* For palm oil prices, including refined oil, Reuters Terminal users can double click on or type.
* To view freight rates from Peninsula Malaysia/Sumatra to China, India, Pakistan and Rotterdam, please key in and press enter, or double click between the brackets.- Reuters
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