Malaysia exported around 1.66 million metric tons of palm oil in November, an increase of 3.8% from a month earlier, cargo surveyor Intertek Agri Services said Friday. The figure is a tad higher than market expectations of 1.62 million-1.65 million tons. Intertek estimated October exports at 1.60 million tons. Another surveyor, SGS (Malaysia) Bhd., is expected to issue its estimate for November later in the day.
Crude palm oil futures on Malaysia’s derivatives exchange ended mostly lower Thursday, reflecting investor concerns over palm oil stock levels. Technical-driven selling pressure and improved South American weather over key soybean growing areas also contributed to lower prices, market participants said.
The benchmark February contract at Bursa Malaysia Derivatives ended 0.3% lower at 2,386 ringgit a metric ton after falling as much as 1.1% to MYR2,367/ton, the lowest since Nov. 15.
"Palm oil recovered some lost ground on short-covering and talks that November exports are likely to be up 1%-3% on month" after several weeks of decline, which could support prices, a commodities broker in Kuala Lumpur said. Trading executives peg November exports at 1.62 million-1.65 million tons, compared with October shipments of around 1.60 million tons. Cargo surveyors SGS and Intertek are scheduled to issue November export data Friday.
Leading oilseed analyst Thomas Mielke is optimistic that palm oil prices are close to bottoming out, and will likely resume an uptrend as inventories are likely to be drawn down on tight global oilseed supplies in the second and third quarters next year. Excluding soybean crop, production of other oilseeds is expected to fall by five million tons in the 2012-13 marketing year that started on Oct. 1., Mr. Mielke said at an event organized by Singapore-based UOB Kay Hian earlier this week.
Open interest on the BMD was 167,282 lots, versus 171,428 lots Wednesday. One lot is equivalent to 25 tons. A total of 24,134 lots of CPO were traded versus 31,818 lots Wednesday. [Dow Jones Newswire]
Traders are looking out for Malaysia's palm products export figures for November due on Friday, with expectations of a slight decline compared with a month ago. The latest data for the first 25 days of the month showed a drop of less than 2 percent.
A lower export demand may push Malaysian inventory levels slightly higher in November despite slowing production. "The market is still under pressure. Exports should be down by more than 1.5 percent for the month," said a trader with a foreign commodities brokerage in Malaysia. "People are asking whether production can neutralize exports, and I think it's unlikely that stocks will go up sharply," he added.
Some traders remained on the sidelines ahead of top analysts presenting their price forecasts for 2013 at the Indonesian Palm Oil Association's two-day conference in Bali on Thursday and Friday. Palm oil output in the world's biggest producer Indonesia is expected to climb 7 percent next year to 27 million tonnes, a top industry association official said on the sidelines of the conference, as three years of acreage expansion efforts bear fruit.
Two trading sources also told Reuters at the conference that India's oilseed industry has submitted a proposal to the government to raise import taxes on palm oil and other edible oils, arguing demand for local output is being hurt after a sharp fall in prices. In related markets, Brent crude oil rose on Thursday on optimism that U.S. lawmakers would reach a deal on fiscal policy and as mounting tension in the Middle East intensified supply concerns. In other vegetable oil markets, U.S. soyoil for December delivery gained 0.4 percent in late Asian trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.2 percent lower.
Technicals suggested palm oil is expected to test a support at 2,353 ringgit, a break below which will lead to a further drop to 2,288 ringgit. [Reuters]
Today’s Support and Resistance for benchmark February contract is located around 2,353 and 2417
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