Malaysian palm oil futures fell to a two-week low on Wednesday in light trade after a long holiday weekend, with traders staying cautious as industry data showed stocks remained high despite coming off record levels. Data from the Malaysian Palm Oil Board, released during the afternoon break, showed that end-stocks in Malaysia, the world's No 2 producer, had inched down 1.9 percent to 2.58 million tonnes in January, missing expectations of a deeper fall.
Cargo surveyor Intertek Testing Services said Malaysia's shipments had surged 18 percent to 440,830 tonnes in the first 10 days of February from a month ago, but traders said export volumes still needed to rise to "decent" levels. "Exports in the last five days of January showed an average of 50,000 tonnes shipped per day, which is good. We were expecting that to carry on in February, but obviously that is not the case," said a trader with a foreign commodities brokerage in Malaysia.
Another cargo surveyor Societe Generale de Surveillance reported a steeper 25.1 percent increase to 429,070 tonnes for the same period. The benchmark April contract on the Bursa Malaysia Derivatives Exchange fell 2.2 percent to close at 2,504 ringgit ($810) per tonne, also its intraday low - a level unseen since January 30. Total traded volumes were thin at 18,873 lots of 25 tonnes each, compared with the average 25,000 tonnes, with many investors still on holiday.
Financial markets in Malaysia were closed on Monday and Tuesday for the Lunar New Year holidays while markets in China, the world's No 2 edible oil importer, remain closed for the rest of the week. Technical analysis showed palm oil may drop to 2,510 ringgit per tonne as a correction from the January 31 high of 2,593 ringgit has not finished, said Reuters market analyst Wang Tao. In competing vegetable oil markets, US soyoil for March delivery fell 0.5 percent in late Asian trade. The Dalian Commodity Exchange will resume trading on Monday.