Malaysian crude palm oil futures dropped to one-month lows on Wednesday as slower overseas demand and concerns over the pace of global economic recovery weakened sentiment. Palm oil fell for a second consecutive day after cargo surveyors reported declines for Malaysian exports during August 1-25 from a month ago.
World equities fell for the fifth day on concerns over the global economy sliding back into recession. "Equities are going through a patch of uncertainty and the market is depressed at this level," said a trader with a Kuala Lumpur-based foreign brokerage.
The benchmark November crude palm oil contract dropped almost 1 percent, or 24 ringgit, to close at 2,486 ringgit ($791.4). The 2,486 ringgit level was last touched on July 28. Overall traded volume nearly tripled to 29,218 lots of 25 tonnes each. Recent strength in the ringgit against the dollar also kept some refiners on the sidelines on concerns that their margins may get eroded from buying crude palm oil in the Malaysian currency and then processing and exporting products in US dollars.
US soyaoil for September fell 0.3 percent in Asian hours as fund buying in the previous session clashed with outlooks for a record large US 2010 soy production. The most-active May soyoil on China's Dalian Commodity Exchange fell 1 percent to 7,908 yuan a tonne. "The soyoil market is undergoing technical adjustment to narrow the spread between the cash market and futures prices," said a Shanghai-based oil analyst.
INDONESIA PALM TRADES: In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, sold 3,500 tonnes of crude palm oil in an auction on Wednesday with the top price at 7,961 rupiah ($0.887) per kg, against 8,035 rupiah a kg on Tuesday.
Producers in Medan, home to Indonesia's main palm oil export port of Belawan in Sumatra, did not hold any auction on Wednesday. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm olein - used as cooking oil - at 8,300 rupiah per kg on Wednesday against 8,350 rupiah per kg the previous day. PT Astra Agro Lestari offered 500 tonnes of super palm kernel oil (PKO) in an auction on Wednesday at $1,160 per tonne. Buyers bid at $1,110-$1,125 per tonne for the super PKO ex-factory Sari Aditya Loka 1 in Teluk Bayur, Jambi.
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