Malaysian crude palm oil futures hit a fresh 10-month low on Tuesday as improving output and slower exports in the Southeast Asian country stirred concerns over swelling stocks. On top of that, recent rains in the United States that could raise harvest forecasts for soyabeans helped ease some concerns over tightening global oilseed supply and weighed on edible oil markets in Asian trade.
Traders also avoided taking long positions ahead of export data for the first half of August due on Wednesday. "Tomorrow's exports are unlikely to be good, and production could climb even higher in August. Prices should be supported at the 2,800-ringgit level," said a dealer with a foreign commodities brokerage in Malaysia. At closing, benchmark October palm oil futures on the Bursa Malaysia Derivatives Exchange dropped 0.5 percent to 2,858 ringgit ($918). The contract earlier touched a low of 2,820 ringgit, a level not seen since Oct 18 last year.
Total traded volumes were high at 31,724 lots of 25 tonnes each, compared to the usual 25,000 lots. On the technicals front, palm oil has support at 2,838 ringgit, said Reuters market analyst Wang Tao. Weaker demand from China and Europe has also weighed on Indonesia as the top palm oil producer lowered its estimate for exports to 17.6 million tonnes in 2012, an official from the Indonesian Palm Oil Association (GAPKI) said late on Monday.
Other vegetable markets traded lower as the US soybean crop condition improved. By 1006 GMT, the most active US soyoil contract for December delivery had lost 0.1 percent and the most active January 2013 soyoil contract on the Dalian Commodity Exchange had lost 0.6 percent.
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