Malaysian palm oil dips

Malaysian palm oil futures ended slightly lower on Tuesday, as worries about the global economy and lower crude prices were offset by expectations of lower production and improving demand in the near-term. The benchmark October contract on the Bursa Malaysia Derivatives Exchange closed 0.3 percent down at 3,113 ringgit ($1,059) per tonne after going as high as 3,130.
Traded volumes for the contract were 11,213 lots of 25 tonnes each, compared with 11,313 lots on Monday. "The market is waiting for new news," an Indonesia-based trader said. "Palm oil fundamentals are supportive with good exports and lower production." "But again, crude oil and other external factors are impacting." On Monday, benchmark prices hit a peak at 3,136, buoyed by export data and as risk aversion eased after Washington reached a last-minute deal to raise the US debt limit and escape default.
Exports of Malaysian palm oil products for July jumped 13.5 percent to 1,628,688 tonnes, cargo surveyor Societe Generale de Surveillance said. "The pulse of the market is invariably bullish," said a Kuala Lumpur-based trader. "Exports are getting better, output lower and grains are supportive." "It is the fasting month, therefore we anticipate output to remain paltry this month," he added.
Concerns about the health of the global economy resurfaced however, after data showed that US manufacturing grew at its slowest pace in two years in July. On Friday, benchmark prices hit 3,080 ringgit - a level unseen since July 19. "In the second half of 2011, CPO prices will level off," said Linda Lauwira, a research analyst at eTrading Securities in Jakarta. "As well as increased production in both Indonesia and Malaysia, crude price oil has been declining thus pulling down demand for bio desel fuel."
In related markets, crude oil fell on continued worries about the growth prospects of the United States, the world's largest crude consumer, after weak global manufacturing data that overshadowed a deal to avert a US debt default. US Soybeans for November delivery, the most actively traded contract, eased, while the most active May 2012 soyoil on China's Dalian Commodity Exchange was steady. Reuters analyst Wang Tao said Malaysian palm oil remained neutral as it is still trapped in a range of 3,083 to 3,138 ringgit per tonne.