Malaysian crude palm oil futures dropped as much as 3 per cent to hit a near two-week low yesterday as weaker soyoil prices dragged on sentiment and some traders unwound positions on fears of slowing exports.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange fell RM71 to a low of RM2,299 per tonne, a level unseen since August 21, before settling at RM2,303.
“The market was playing catch up with soy, crude oil markets after they declined 3 per cent or more on Monday. Exports are weak but it’s not too bad, the only question is whether the gap will widen in September,” said a trader with a foreign commodities broker.
Exports have fallen after 4 months of gains, data from Intertek Testing Services showed yesterday. August shipments fell 4.9 per cent to 1,332,272 tonnes from 1,401,263 tonnes shipped in July, ITS said.
Another cargo surveyor, Societe Generale de Surveillance, said exports for last month fell 7.9 per cent to 1,298,462 tonnes.
Weaker exports come as production may stage a recovery as the Malaysian Meteorological Department forecast improving rains in the key palm producing states after September, which put pressure on the palm oil market.
US spot-month soybean futures rose 0.6 per cent yesterday, recouping some losses, but new-crop soy was little changed as forecasts of perfect weather lifted expectations of a bumper harvest this year.
Oil edged higher above US$70 a barrel yesterday, after a 4 per cent fall overnight, which still weighed on vegetable oil markets, as soyoil and rapeseed oil are increasingly used as a biofuel foodstock in Europe and South America. Source : Business Times]]>