Malaysian palm oil futures ended lower on Wednesday, as investors stayed cautious on rising stocks and renewed fears about a slowing global economy on Spain's financing woes. Palm oil stocks in No 2 producer Malaysia look set to climb higher on strong production, and while exports rose from a month ago, traders said the increase was not enough to bring down high inventory levels, which hit a 10-month high in August.
Malaysian palm oil exports rose 11 percent for the first 25 days of September from a month ago, cargo surveyor data showed on Tuesday. "The export numbers are a non-factor now - the first 25 days is not that fantastic. We need bigger exports coming in to reduce stocks," said a trader with a foreign commodities brokerage in Malaysia. The benchmark December contract on the Bursa Malaysia Derivatives Exchange lost 1.8 percent to close at 2,621 ringgit ($851) per tonne.
Futures hit a two-year low on Monday and have lost more than 17 percent so far this year, on track for their worst yearly performance since 2008. Total traded volumes stood at 34,447 lots of 25 tonnes each, higher than the usual 25,000 lots. Technicals showed that over the next three months, palm oil would drop into a support zone of 2,387 to 2,415 ringgit per tonne, a break below which will open the way towards a range of 1,899 to 1,952 ringgit, said Reuters analyst Wang Tao. In other vegetable oil markets, US soyaoil for December delivery lost 1.4 percent in late Asian trade. The most active January 2013 soyaoil contract on the Dalian Commodity Exchange also edged down 1.8 percent after touching its lowest level since July 27.
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