VEGOILS-Palm oil falls to 2-week low on stocks concerns

Thu Nov 29, 2012 5:15am EST

* Palm oil to test support at 2,353 ringgit - technicals
    * Traders eye 2013 price forecasts at Bali conference on
Thursday, Friday
    * Indonesia palm oil output to climb 7 pct to 27 mln tonnes
in 2013
    * India oilseed industry pushes for hike in import taxes -
sources

 (Updates prices)
    By Chew Yee Kiat
    SINGAPORE, Nov 29 (Reuters) - Malaysian palm oil futures
fell to a 2-week low on Thursday, extending losses for a third
straight session as weak sentiment dominated the market with
investors worrying about record high stocks.
    Traders are looking out for Malaysia's palm products export
figures for November due on Friday, with expectations of a
slight decline compared with a month ago. The latest data for
the first 25 days of the month showed a drop of less than 2
percent.  
    A lower export demand may push Malaysian inventory levels 
slightly higher in November despite slowing production. 
    "The market is still under pressure. Exports should be down
by more than 1.5 percent for the month," said a trader with a
foreign commodities brokerage in Malaysia. 
    "People are asking whether production can neutralise
exports, and I think it's unlikely that stocks will go up
sharply," he added.
    At the close, the benchmark February contract on
the Bursa Malaysia Derivatives Exchange fell 0.3 percent to
2,386 ringgit ($782) per tonne. Prices earlier touched a low of
2,367 ringgit, a level last seen on Nov. 14.
    Technicals suggested palm oil is expected to test a support
at 2,353 ringgit, a break below which will lead to a further
drop to 2,288 ringgit.   
    Total traded volumes stood at 24,134 lots of 25 tonnes each,
thinner than the usual 25,000 lots, as some traders remained on
the sidelines ahead of top analysts presenting their price
forecasts for 2013 at the Indonesian Palm Oil Association's
two-day conference in Bali on Thursday and Friday.
 
    Palm oil output in the world's biggest producer Indonesia is
expected to climb 7 percent next year to 27 million tonnes, a
top industry association official said on the sidelines of the
conference, as three years of acreage expansion efforts bear
fruit. 
    Two trading sources also told Reuters at the conference that
India's oilseed industry has submitted a proposal to the
government to raise import taxes on palm oil and other edible
oils, arguing demand for local output is being hurt after a
sharp fall in prices.    
    In related markets, Brent crude oil rose on Thursday on
optimism that U.S. lawmakers would reach a deal on fiscal policy
and as mounting tension in the Middle East intensified supply
concerns. 
    In other vegetable oil markets, U.S. soyoil for December
delivery gained 0.4 percent in late Asian trade. The
most-active May 2013 soybean oil contract on the Dalian
Commodity Exchange closed 0.2 percent lower.  
    
  Palm, soy and crude oil prices at 1006 GMT
                                                                                                     
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      DEC2    2170   +10.00    2120    2182     254
  MY PALM OIL      JAN3    2320    -6.00    2297    2337    3714
  MY PALM OIL      FEB3    2386    -8.00    2367    2406   13587
  CHINA PALM OLEIN MAY3    6744   -44.00    6702    6780  649044
  CHINA SOYOIL     MAY3    8590   -20.00    8524    8614  699060
  CBOT SOY OIL     JAN3   50.58    +0.20   50.02   50.60    7902
  NYMEX CRUDE      JAN3   87.31    +0.82   86.55   87.38   15655
                                                                                                     
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. cents per pound
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne
  Crude in U.S. dollars per barrel
    
($1=3.04 ringgit)

 (Editing by Miral Fahmy and Robert Birsel)
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