Malaysian crude palm oil futures ended lower on Friday, as expectations of higher palm oil stocks in Malaysia offset concerns over crop-damaging weather in the US Midwest that lowered soybean oil supply. Palm oil futures posted an 0.8 percent weekly loss, as weather-driven gains were capped by weak exports and higher production in No.2 producer Malaysia, which could push stocks up in July after they fell to a 14-month low last month.
"From the inventory level alone, it is negative to prices. But the dry season in the United States is still very much in the picture," said Alan Lim, research analyst with Malaysia's Kenanga Investment Bank. The benchmark October palm oil futures on the Bursa Malaysia Derivatives Exchange were down a slight 0.1 percent to close at 3,042 ringgit ($965) per tonne.
Traded volumes stood at 25,325 lots of 25 tonnes each, slightly higher than the usual 25,000 lots. Malaysia's palm oil exports fell 23 percent over the July 1-20 period from a month ago, cargo surveyors Intertek Testing Services and Societe Generale de Surveillance said.
Late on Thursday, India lifted a six-year-old freeze on the base import price of refined palmolein, a move that will make palm oil imports from Indonesia more costly. Traders said the move to protect domestic refiners could support crude palm oil prices as the demand outlook for the feedstock brightens. In other vegetable oil markets, the most active US soyoil for December delivery was almost flat while the most active January 2013 soyoil contract on the Dalian Commodity Exchange closed 0.2 percent higher.