Malaysian palm oil prices pressured by weak crude, market watching monsoon impact

KUALA LUMPUR: Malaysian palm oil futures dropped on Friday, tracking falls in crude oil prices and competing vegetable oil markets, although losses were limited by concerns that monsoon rains could curb output in December.
    The benchmark February contract on the Bursa
Malaysia Derivatives Exchange closed 1.1 percent lower at 2,171
ringgit ($621) per tonne. Prices had fallen to a one-week low of
2,119 ringgit on Tuesday.
    Total traded volume stood at 46,017 lots of 25 tonnes, above
the daily average of 35,000 lots.
    Brent crude futures fell to its lowest level in more
than five years below $63 a barrel, under pressure from a glut
of oil in the market. Low crude prices raised concern that
buyers could shift fuel demand away from palm. 
    Also, market participants expect December monsoon rains and
flooding to significantly curb yields of palm fruit and reduce
oil extraction rates.
    "Demand is expected to garner momentum in the first quarter
next year. Prices will eventually trade circa 2300-2400 ringgit
by that period," said Lingam Supramaniam, director at
Malaysia-based commodities firm Pelindung Bestari.
    In a note to clients, analysts at CIMB said they expected
palm oil stocks to fall by 2 percent month-on-month by the end
of December to 2.2 million tonnes due to lower production.
    "We expect palm oil production to decline by 9 percent
month-on-month to 1.6 million tonnes in December 2014 due to
seasonal factors," CIMB said.
    In competing vegetable oil markets, the U.S. soyoil contract
for January edged down 0.3 percent in late Asian trade,
while the most active May soybean oil contract on the
Dalian Commodity Exchange fell 0.5 percent.  
    U.S. soybean futures were 0.4 percent lower but were
still on track for their second consecutive weekly gain. 
    India's palm oil imports fell 8 percent to 796,587 tonnes in
November from a month earlier, data from the Solvent Extractors'
Association of India (SEA) showed. 
    
  Palm, soy and crude oil prices at 1001 GMT
                                                                                                           
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      DEC4    2168    -7.00    2145    2190     277
  MY PALM OIL      JAN5    2158   -22.00    2150    2199    1103
  MY PALM OIL      FEB5    2171   -24.00    2165    2216   22501
  CHINA PALM OLEIN MAY5    5010   -20.00    5002    5054  841794
  CHINA SOYOIL     MAY5    5662   -28.00    5660    5728  350794
  CBOT SOY OIL     JAN5   31.93    -4.20   31.91   32.15   31177
  INDIA PALM OIL   DEC4  419.80    -4.20  417.90  424.70     952
  INDIA SOYOIL     DEC4  579.00    -1.55  578.70  581.00    6775
  NYMEX CRUDE      JAN5   59.28    -0.68   58.80   59.52   33882
                                                                                                           
  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= 3.4940 Malaysian ringgit)
 ($1= 6.1901 Chinese yuan)
 ($1= 62.4850 Indian rupee)
- Reuters