Palm oil lower

Malaysian palm oil futures closed lower on Tuesday, as renewed fears over the euro zone debt crisis weighed on investor sentiment and the broader financial markets, although losses were limited by lower palm oil stocks. Palm oil, along with other commodities such as crude oil and soybean oil, gained on Monday on news that eurozone finance ministers approved a $125 billion rescue package for struggling Spanish banks.
But investors feared that the bailout would not be sufficient to solve the crisis and the focus has now shifted to the Greek elections on June 17 that could lead to the nation's exit from the currency bloc. "A key factor contributing to the price downtrend is the renewed euro zone debt crisis and uncertain global economic outlook, which have dampened sentiments as well as raising the prospect of lower demand for commodities, including vegetable oils," said Malaysia's Affin Investment Bank in a research note. Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 0.8 percent to close at 2,965 ringgit ($933) per tonne. Traded volumes stood at 26,461 lots of 25 tonnes each, just slightly higher than the usual 25,000 lots.
Malaysian palm oil stocks were at a 13-month low in May, and that has helped cut some losses. Malaysian palm oil exports for the first 10 days of June fell 6.6 percent, said cargo surveyor Intertek Testing Services, going against market expectations of a stronger demand ahead of the Muslim fasting month starting in mid-July.
Another cargo surveyor Societe Generale de Surveillance reported a slight 1.8 percent increase for exports for the same period. Traders are eyeing a supply-demand report from the US Department of Agriculture (USDA) due later in the day that could show tighter soyabean supply and lend support to palm oil. On the technicals front, palm oil is biased to fall below 2,925 ringgit per tonne, as the rebound from its June 4 low has completed, said Reuters market analyst Wang Tao In other vegetable oil markets, US soyoil for July delivery gained 0.3 percent in late Asian trade while the most active January 2013 soyoil contract on the Dalian commodity exchange closed 0.3 percent lower.