European palm oil prices were lower on Wednesday as a strong dollar put pressure on the market and new Malaysian export data showed a slowdown in demand for July. Crude palm oil prices were down between $5 and $7.50 a tonne with the August-September position closing at $627.50.
RBD palmolein asking prices remained largely unchanged, but trading activity suggested buyers continued to push down. Palmolein for October-December delivery last traded at prices between $605 and $600, down $2.50 to $10 from the previous day's trades. The decrease was partially in response to a 15.1 percent drop in Malaysian palm oil exports for July 1-15 from the same time the previous month, according to figures released on Wednesday by cargo surveyor Societe Generale de Surveillance.
Data from cargo surveyor Intertek Testing Services also showed exports during that period fell 14.6 percent. Prices were further squeezed by a rise in the dollar, after the US Federal Reserve confirmed plans for a widely-expected hike in interest rates later this year. Meanwhile, European soybean oil prices were also cut by $5, deepening losses from Tuesday's session. The shift mirrored a sharp decline in Chicago prices, which dipped by 0.77 cents to 31.63 cents per lb at 1634 GMT. The shift marked a drop of nearly 2.4 percent from the previous day's close.
The cut in soybean oil prices follows news that soybean crush rates reached record levels last month, as soymeal demand and crush margins rose. Forecasts for better weather in the US Midwest, where heavy rains have threatened crops in recent months, have also placed pressure on prices this week. Rapeseed oil prices were also down between 5 euro and 7 euro on Wednesday, tracking losses in other vegetable oil markets. But bidding prices indicated that dealers are still concerned about a potential shortfall in this year's rapeseed crop. The August-October position last traded at 713 euro, 2 euro above the lowest asking price.
Germany's association of farm co-operatives forecast in June a 20 percent reduction in domestic rapeseed output for 2015. Unusually warm and dry weather across Europe since then has added to concerns about smaller harvests and poor crop conditions. "I think, overall, we will see below 20 million (tonnes) in Europe," one trader said. "With less biodiesel right now, it's enough. But these are not bearish conditions in the end."