Malaysian palm oil slides

Malaysian crude palm oil fell 2.1 percent to more than three-week lows on Thursday, pressured by weak crude and slowing shipments, although traders said drought hurting South American soyoil could spur demand. Palm oil, used in products ranging from biscuits to biofuel, have soared by a third from an October 28 low of 1,331 ringgit thanks to falling domestic stockpiles but have failed to stay above 1,800 ringgit due to volatile crude markets and long Lunar New Year holidays.
"The market is very quiet for the holidays, palm producers only enter the market in the mornings and then get out in the afternoon," said a trader with a foreign commodities brokerage. Another cargo surveyor, Societe Generale de Surveillance, reported declines of 24.1 percent to 1,016,477 tonnes.
Oil dropped below $42 a barrel on Thursday, as data showing a further build in crude stocks in the United States heightened expectations of falling demand for oil from the world's largest fuel consumer. US grain futures edged lower on Thursday as the market awaited further weather updates from Argentina, where the worst drought in 48 years threatens to hit the quantity of soybeans, corn and wheat available for export.
While there are forecasts for rain early next week, doubt remains the wet weather will be sufficient to help the crops. Soyoil for March delivery fell nearly 1 percent in late Asian trade. Soyoil and palm oil often move in tandem with crude oil as these vegetable oils find use as a feedstock for biodiesel which competes with petroleum diesel.
INDONESIA PALM TRADES In Indonesia, the world's largest palm oil producer, the state marketing centre said it sold the entire 5,500 tonnes of palm oil it offered in an auction at a top price of 6,128 rupiah ($0.54) per kg. The centre, which normally sells palm oil from state plantations, did not hold a palm oil tender on Wednesday.
Producers in Medan - home to Belawan port, Indonesia's key palm oil export port - sold palm oil at 6,126 rupiah per kg, against 6,190-6,197 rupiah per kg on Wednesday. Meanwhile, refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,650 rupiah per kg, unchanged from Wednesday. In the Malaysian physical market, palm oil for January and February shipment was quoted at 1,750-1,770 ringgit per tonne in the southern and central regions.