Palm oil remains down, Greece deal eyed
November 23, 2012
Malaysian palm oil futures fell on Thursday, slipping for a third straight day, as slowing exports continued to weigh and investors stayed cautious ahead of a bailout deal for Greece that could boost sentiment. International lenders will meet again next Monday after they failed for the second week to reach a deal to release emergency aid for Greece, but major lender Germany signalled that significant divisions remain.
Cargo surveyor data showed Malaysian exports of palm products for the first 20 days of November inched lower from a month ago, and while the fall was not significant, it nonetheless fuelled concern at a time when stocks had climbed to a record 2.51 million tonnes in October.
“The price outlook for crude palm oil has deteriorated. With the cargo surveyors’ export data for the first 20 days of November showing a decline of about 3 percent, we see a higher possibility now of November’s inventory level to register another record high,” Alan Lim Seong Chun, research analyst with Malaysia’s Kenanga Investment Bank, said in a note on Thursday.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange slid 1.3 percent to close at 2,411 ringgit ($788) per tonne. Prices traded in a range of 2,399 to 2,449 ringgit. Total traded volumes stood at 36,386 lots of 25 tonnes each, higher than the usual 25,000 lots. Technicals showed palm oil is expected to drop to 2,321 ringgit as it did not break a resistance at 2,464 ringgit, said Reuters market analyst Wang Tao.
Traders will be looking for clues from the meeting next Monday after European demand for palm oil showed signs of slowing. It could take a further hit if international lenders fail again to agree on how to get Greece’s debt down to a sustainable level. In other vegetable oil markets, the most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.2 percent higher. The US financial markets were closed for the Thanksgiving holiday.