Malaysian palm oil futures edged lower on Wednesday on an uncertain global economic outlook and weaker commodity markets although hopes for strong export data curbed losses. Palm oil has lost about 18 percent so far this year thanks to a stock build and financial markets turning volatile over the grim outlook in the United States and Europe and efforts by central bankers to prop up these economies.
"The market is clearly following overseas developments but given that Malaysia is on holiday most of next week, we will see traders evening out their positions this week," said a dealer with a foreign commodities brokerage. The benchmark November crude palm oil contract on Bursa Malaysia Derivatives settled down more than 1 percent to 3,036 ringgit ($1,023.77). The previous day the contract touched a one-week high of 3,070 ringgit.
Overall traded volume was light at 19,825 lots of 25 tonnes each, compared to the usual 25,000 lots. Malaysian palm oil exports are up 13-14 percent to 1.17 million tonnes so far in August and cargo surveyors Intertek Testing Services and Societe Generale de Surveillance are likely to report strong data. "But there are some in the market who are saying that exports may only rise marginally for the full month given the holidays next week," said another Malaysian trader.
Palm oil exports maintaining last month's high levels will still cut into stocks as production slows with plantation workers in top growers Indonesia and Malaysia taking extended leave for Eid celebrations. Palm oil investors holding on to Indonesian stocks ahead of possible changes to the country's export tax, could swamp a well-supplied market and further pressure prices already weakened by global economic fears, analysts and traders said on Wednesday. US soyoil for September delivery slipped during Asian hours, and the most active May 2012 soyoil contract on China's Dalian Commodity Exchange edged up 0.4 percent.
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