Malaysian palm oil creeps down

Malaysian palm oil futures ended down on Monday as investors took profit on expectation of milder weather and due to easing crude oil prices. Benchmark June crude palm oil futures on the Bursa Malaysia Derivatives Exchange closed down 5 ringgit or 0.19 percent at 2,572 ringgit ($775) per tonne. Overall trade volume stood at 12,691 lots of 25 tonnes each, higher than the usual 10,000 tonnes.
"The palm oil millers in the south released a report which show there may be a production hike of about 20 percent this month which prompted late selling," a trader in Kuala Lumpur said. "It's still quite warm, but in Kuala Lumpur we have seen good rains in the past days. So the concern of El Nino is easing. This is good for crop," he said.
Market players initially expected dry weather in Malaysia's key palm oil areas would reduce production this month. One trader in Kuala Lumpur said crude palm oil output in March could fall to 1.1 million tonnes from 1.17 million tonnes a month ago due to dry weather sapping yields. That figure is slightly lower than the same period a year earlier.
On Saturday, cargo surveyor Intertek Testing Service said, palm oil products exports from Malaysia rose 3.4 percent during March 1 to 20 from the same period a month ago. Cargo surveyor Societe Generale de Surveillance reported on Monday exports of Malaysian palm oil products for March 1-20 dropped 2.4 percent to 844,474 tonnes from 865,593 tonnes shipped between February 1 and 20.
"Players are now watching the demand because external market is uncertain," another trader said. Crude oil fell more than 1 percent to below $80 a barrel on Monday, falling for a third session, weighed down by a firmer dollar, worries over Greece's debt and ample oil supplies. US soyoil for July delivery in the Chicago Board of Trade inched up 0.13 percent in Asian hours. In China, the most active September's soybean oil contract at Dalian Commodity Exchanges rose 0.46 percent.
INDONESIA PALM TRADES In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, sold 6,000 tonnes of crude palm oil at a top price of 7,470 rupiah ($0.815) per kg, against 7,434 rupiah per kg on Friday. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold any palm oil tenders on Monday.