Malaysian crude palm oil futures fell on Tuesday after hitting a fresh one-month high earlier in the day, as traders shifted their focus to prospects of rising supplies in the months to come. Crude oil, hovering near one-month highs, gave markets some support, although traders were eyeing a slew of data on Malaysian palm oil stocks, production and exports due on Wednesday that may point to rising supply.
The benchmark November crude palm oil contract on Bursa Malaysia Derivatives Exchange dropped 1.2 percent to 2,643 ringgit ($852.3) after touching an intraday high of 2,690 ringgit - a level unseen since August 16. Overall traded volume rose to 14,539 lots of 25 tonnes each, up from the usual 10,000 lots. "Supplies are rising all over the place, the US as well as Southeast Asia. What we need to see is strong demand to push the markets higher," said a trader with a foreign commodities brokerage.
A Reuters poll showed Malaysia's August palm oil stocks probably hit four-month highs as strong production outpaced exports. Reinforcing this trend, Indonesian planter Astra Agro Lestari reported a 5.6 percent increase of palm fruit bunches in August from a year ago.
Some traders expect palm oil demand to start rising again as top buyers China and India get ready for a string of festivals in October and November. But cargo surveyors have been reporting almost flat demand for Malaysian palm for September 1-10. Industry regulator the Malaysian Palm Oil Board will unveil its official data on the vegetable oil's stocks, output, exports and imports on Wednesday. Cargo surveyors will report palm oil exports for September 1-15 on the same day.
INDONESIA PALM TRADES: In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, did not hold any palm oil auction on Tuesday. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, sold crude palm oil at between 8,080 rupiah ($0.898) to 8,105 rupiah per kg on Tuesday.
Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm olein - used as cooking oil - at 8,600 rupiah to 8,650 rupiah per kg. PT Astra Agro Lestari did not sell 1,500 tonnes of super palm kernel oil (PKO), which was offered at $1,275 per tonne, in an auction on Tuesday. Buyers bid at $1,175-$1,215 per tonne for the super PKO free on board at P. Dewa, Kumai.
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