Palm oil dips

Malaysian palm oil futures dipped on Wednesday as investors turned wary of record supplies of rival oilseeds that could overwhelm global demand and curb appetite for the tropical oil. Palm prices rose 15 percent in September, their biggest monthly gain since April 2009, lifted by robust export demand and anticipation for output to weaken.
But traders said while domestic fundamentals were supportive, the prospects of huge soybean crop in the United States and South America painted a bleak picture for soyoil prices, which are tracked by palm. "The market is trying to find fresh direction," said a trader with a local commodities brokerage in Malaysia. "October output and demand will be crucial to sustain the current relatively high prices."
The benchmark December contract on the Bursa Malaysia Derivatives Exchange had edged down 1 percent to 2,199 ringgit ($672) per tonne by Wednesday's close, marking its second fall in eight sessions. Prices ranged between 2,189-2,223 ringgit. Total traded volume stood at 43,624 lots of 25 tonnes each, above the usual 35,000 lots.
Technicals showed palm oil faces resistance at 2,224 ringgit per tonne and may retrace to support at 2,194 ringgit, said Reuters market analyst Wang Tao. Market participants are looking to key industry data next week that will reveal Malaysia's palm oil end-stocks and production in September, and hint of trends going into this month. A surprise drop in Malaysian output, and decisions by the world's top two palm growers to exempt export duties on the crude grade are likely to cap a rise in inventories.
The export tax move had an immediate effect on buying interest for Malaysian palm oil products. Cargo surveyors reported that the No 2 producer's exports were 16-17 percent higher in September compared with August, with stronger demand from India, China and Europe. Indonesia's move to pass a plantation bill that aims to maximise land usage and impose stricter rules on foreign ownership may prompt Malaysian planters to take a "wait and see" attitude before committing to more planting activities in the top grower, analysts said. In vegetable oil markets, the US soyoil contract for December rose 0.2 percent in late Asian trade. Chinese markets are closed for a week-long holiday.