Malaysian palm oil hits two-week lows

Malaysian crude palm oil futures slid 4.8 percent on Monday, hitting a two week low, as traders booked profits after an industry analyst over the weekend painted a short-term bearish picture of the market. Palm oil, down 6 percent so far in the second half of this year, was weakened by lower prices of vegetable oils across the market and bearish technicals, traders said.
The benchmark December contract on the Bursa Malaysia Derivative Exchange fell as much as 104 ringgit to 2,082 ringgit ($599.5) before settling down 83 ringgit at 2,103 ringgit. Prominent industry analyst Dorab Mistry at a vegetable oils conference in India said palm oil prices needed to fall to 1,900 ringgit to stimulate demand and keep stocks under control. "Its a day for numbers.
Mistry's magic number is 1,900 ringgit and the market has slipped below the 200-moving average and the 10-day moving average. So the bearish momentum is there," one dealer with a local commodities brokerage said. Palm oil fell to its lowest since September 14, going past its 200-day moving average, which stood at 2,142 ringgit a tonne and 2,150 ringgit for the 10-day average, which traders said suggested further long- and short-term declines.
Part of the declines could be attributed to fears of weak exports although some dealers expect big buyers like China and India to resume buying while Middle Eastern countries are likely to restock after Ramazan. Global soyoil markets were down in Asian trade, sapping sentiment.
US soyoil for October delivery fell 1.6 percent on prospects of a record US soy harvest this year. Bids for crude palm oil for September and October delivery were seen at 2,170 ringgit while offers stood at 2,190 ringgit for the southern region. Trades were done at 2,190 ringgit a tonne.
INDONESIA PALM TRADES In Indonesia, the state marketing centre based in Jakarta, sold 4,000 tonnes of palm oil at a top price of 6,537 rupiah ($0.673) a kg, down from 6,718 rupiah per kg on September 17, before the centre closed for Eid Al Fitr holiday.
Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold any palm oil tenders. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,850 rupiah per kg, down from 6,900 rupiah per kg before the holiday.