Malaysian crude palm oil futures fell on Friday after losses in rival US soyoil and lingering weakness in a market surprised a day ago by forecaster Ivan Wong's high stock estimates for October.
Anticipation over export data for October 1-25, due from cargo surveyors on Monday, however, prevented sellers from driving prices down.
Palm oil exports for October have already been weak, falling almost 10 percent for the first 20 days of the month compared with September 1-20.
But with new shipment data due immediately after the weekend, players were inclined to hold positions for clearer direction, dealers said.
The benchmark third-month January crude palm oil contract on the Malaysia Derivatives Exchange closed 6 ringgit, or 0.4 percent, down at 1,388 ringgit ($365.26) a tonne.
Dealers pegged immediate support for the contract at 1,380 ringgit and major support at 1,350.
Exports for September 1-25 averaged 1.1 million tonnes.
"If we are anywhere near 15 percent lower than that for October 1-25, we are in trouble," said a trader, adding that the 1,350 ringgit range could then be tested.
Dealers said prices of rival soyoil would also be key to the palm oil market next week.
Soyoil and palm oil compete for the same export markets and their prices often move in step.
Soyoil futures on the Chicago Board of Trade closed 0.07-0.23 cent a lb lower on Thursday on disappointing weekly sales figures of US soyoil. This put pressure on palm oil right from the market's open in Kuala Lumpur on Friday.
January palm oil hit an intraday low of 1,387 ringgit after peaking at 1,398.
Aside from forward March, which closed two ringgit up, all other contracts ended 6 to 8 ringgit down.
Trade was thin at 2,331 lots of 25 tonnes each. The market usually sees a volume of 6,000 lots or more on a busy day.
"I think people are still worried about what Ivan Wong said yesterday," said a trader.
Forecaster Wong had projected a closing stock of 1.44-1.45 million tonnes in October, against industry expectations of 1.30-1.40 million tonnes.
Dealers said the last time the market was burdened by such a heavy inventory of palm oil was in October 2000 when stocks stood at 1.4 million tonnes.
But the average price of crude palm oil then was around 800 ringgit a tonne.
Dealers said current fundamentals for palm oil would be even weaker if the bumper US soybean crop for 2004 and the drop in Indian demand for oils were factored in.
The US Department of Agriculture has estimated that the 2004 soyabean crop will produce a record 3.1 billion bushels, which analysts said could result in a global soyoil glut.
Palm oil exporters also fear that India - the world's biggest buyer of edible oils - will only make limited purchases until December after having taken abundant supplies for festivities lasting to the year-end.
Wong said Malaysian palm oil stocks will balloon in October because exports were expected to fall to around 1.18 million tonnes from September's official record of 1.29 million tonnes.
But he expected production to hold up reasonably well at 1.41 million tonnes compared with September's 1.49 million tonnes.
Cash prices of crude palm oil were steady on Friday due to short-covering activity.
Physical oil for October saw buyers/sellers at 1,440/1,445 ringgit a tonne in Malaysia's southern and central regions, unchanged from Thursday's close.
Trades were reported at 1,445-1,440 ringgit in both regions.
Physical oil for November saw bids/offers at 1,435/1,445 ringgit a tonne. Deals were done at 1,440-1,435 ringgit in both the southern and central zones.
PALM OIL FUTURES:
October (south): 1445
Open/High/Low: 1388/1398/1387
Previous close: 1445
PALM OIL PHYSICALS:
January (3rd month): 1388
Previous settlement: 1394
FUTURES: Benchmark January down 6 ringgit at 1,388 ringgit ($365.26) a tonne after drop in rival soyoil and lingering concerns over high stocks of palm oil forecast for October.
PHYSICALS: Steady, with October and November maintaining offers at 1,445 ringgit a tonne on short-covering activity.
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