KUALA LUMPUR, Sept 5: Malaysian crude palm oil prices slipped on Wednesday on market expectations of a stock build although losses were curbed by prospects of tight global edible oil supplies from the drought-hit, soy-exporting U.S. Midwest.
Palm oil prices have been treading water even though the U.S. Soy market hit a record high the previous day, as traders were on the lookout for Malaysian August stocks data due next week.
‘(The) upside will be capped by the coming Malaysian Palm Oil Board (MPOB) inventory data, which we expect will remain above the psychological range of 2 million tonnes,’ Kenanga Investment’s Alan Lim said in a note.
‘On the other hand, the downside will be supported by crude palm oil ‘s above-average discount of $290 per tonne against soybean oil,’ he added.
By the midday break, the benchmark November 2012 contract on the Bursa Malaysia Derivatives Exchange fell 0.6 percent to 3,040 ringgit ($976)per tonne.
Total traded volume stood at 8,727 lots of 25 tonnes each, lower than the usual 12,500 lots, mirroring investor caution ahead of a European Central Bank meeting on Thursday and slew of global economic data on Friday.
Reuters analyst Wang Tao said technicals for palm oil looked neutral with a range of 3,032 to 3,093 ringgit per tonne.
The market expects Malaysia’s August palm oil stocks to have climbed to their highest in nine months as still-high produ+ction offset strong exports, a Reuters poll showed.
Higher palm oil stocks could signal more demand in months to come. Hamburg-based oilseeds analysts Oil World said global dependence on palm oil is expected to rise significantly in the next 12 months to compensate for insufficient supplies of other vegetable oils.
U.S. Soyoil for December delivery fell 0.7 percent in Asian trade hours after soybeans hit a record high and lower crude oil market.
The most active January 2013 soyoil contract on the Dalian Commodity Exchange dropped 0.5 percent.
(AGENCIES)
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