Malaysian crude palm oil futures fell to a one-month low on Tuesday, tracking losses in soybean futures, which had posted their biggest daily drop in a year on a better-than-expected harvest in the US Midwest. Palm oil futures lost as much as 5.3 percent after resuming trading following a holiday break, as signs of better soybean yields in the US Midwest and favourable crop weather in Brazil brightened global oilseed supply prospects.
"It's purely because of the grains complex. People are cashing out on the weather, so that triggered a lot of short orders, especially on the US side," said a trader with a foreign commodities brokerage. The benchmark December 2012 contract on the Bursa Malaysia Derivatives Exchange slid 125 ringgit to close at 2,861 ringgit ($936), off an earlier low of 2,827 ringgit, a level last seen on August 15.
Total traded volume stood at 57,092 lots of 25 tonnes each, much higher than the usual 25,000 tonnes, as traders hedged positions and booked profits. Resilient demand for the edible oil failed to turned the market around. Exports for the first half of September rose 12 percent from a month ago, cargo surveyer data showed. Technicals were bearish as palm oil will fall to 2,573 ringgit per tonne over the next four weeks, Reuters market analyst Wang Tao said based on a wave analysis. In other vegetable oil markets, US soyaoil for December delivery fell 0.4 percent by 1004 GMT. The most active January 2013 soyaoil contract on the Dalian Commodity Exchange closed 2.8 percent lower after hitting a near 1-month low.
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