SINGAPORE: Malaysian palm oil futures fell to their lowest in more than two weeks on Tuesday, tracking losses in the US soy market ahead of the next US Department of Agriculture production forecast.
Soybeans have lost almost 1.5 per cent so far this week, weighing on palm oil, a close substitute for soybean oil.
Palm investors were also cautious in the morning session ahead of August stocks data. The Malaysian Palm Oil Board (MPOB) numbers came after the mid-day break and showed a 0.1 per cent increase from a month earlier.
The reported end-stocks level, at 1.67 million tonnes, was below earlier expectations for a four per cent rise to 1.73 million tonnes, but failed to lift the market.
"Palm oil is down mostly on external markets today, for instance look at Dalian soybean oil. There is still uncertainty regarding the US dry weather impact on soy, and globally we are also looking at the situation in Syria," said a trader with a foreign commodities brokerage in Kuala Lumpur.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 2.1 per cent to close at RM2,348 per tonne, slightly above its intraday low at RM2,346, a level last seen on August 23.
Total traded volume stood at 34,291 lots of 25 tonnes each, a touch lower than the average 35,000 lots.
Technicals showed palm oil may drop to RM2,323 per tonne after a moderate rebound to RM2,385, according to Reuters market analyst Wang Tao.
Malaysian palm oil exports for September 1-10 rose 10.8 per cent to 462,671 tonnes, from 417,414 tonnes during August 1-10, cargo surveyor Intertek Testing Services said after the mid-day break.
Traders said while the exports figures were encouraging, a recovery in the ringgit, that makes the feedstock more expensive to overseas buyers, probably kept some investors on the sidelines. The Malaysian currency has recovered almost 1.6 per cent against the greenback this week.
In other markets, global oil prices fell to about US$113 a barrel on Tuesday after a Russian proposal to avert a US strike on Syria appeared to gather steam, easing investor concerns that another Middle East conflict would further disrupt fuel supplies.
In vegetable oil markets, the US soyoil contract for December was almost flat in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange lost 1.6 per cent.-- Reuters