Malaysian palm oil futures fell for a third session in a row on Monday, with buying interest dampened by high inventories and expectations of soft export demand. The February benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to 2,284 ringgit ($531.04) a tonne at the close of trade.
"People still feel that stocks are too high. For this month at end-November they are expecting stocks at similar levels, putting a cap on prices," said a trader based in Kuala Lumpur. "Unless we start seeing stocks being reduced, prices will be in range." Palm oil prices have traded in a 126-ringgit range between 2,260 ringgit and 2,386 ringgit since mid-October.
Traders expect only a minimal rise in exports, when data from cargo surveyor Intertek Testing Services for November 1-25 is released, compared with the same period in October, a trader said, adding exports could even fall as shipments are still slow. Exports of Malaysian palm oil products for November 1-20 were up 4.3 percent on a month earlier to 970,057 tonnes. Palm oil stocks in Malaysia, the world's no. 2 producer, rose to a near-15-year high in October on a surprise rise in output, weighing down on benchmark prices.
Traded volume stood at 31,453 lots of 25 tonnes each at the end of the trading day. Palm oil is biased to break a support at 2,291 ringgit per tonne and fall to the next support at 2,262 ringgit, as indicated by its wave pattern and a Fibonacci projection analysis, according to Wang Tao, a Reuters market analyst for commodities and energy technicals. In other vegetable oil markets, the US December soyoil contract fell 1.2 percent, while the January soybean oil contract on the Dalian Commodity Exchange rose 1.6 percent.