20120912 1456 Palm Oil Related News.

VEGOILS-Palm oil down on rising stocks, USDA in focus
Wed Sep 12, 2012 1:25am EDT
Palm oil futures down on rising stockpile concerns in September
Production seen up 10 percent, stocks could surge more than 2.2 mln tonnes
Prices likely to drop to 2,869 ringgit per tonne-technicals
Markets eye U.S. Agriculture report that may show tightening soy supply

    By Anuradha Raghu
    KUALA LUMPUR, Sept 12 (Reuters) - Malaysia crude palm oil
futures dipped on Wednesday on expectations of higher production
this month could lead to a stock build up although agriculture
markets were waiting for a key U.S. report on soybean supply
later in the day.
    Palm oil prices have lost nearly 9 percent so far this year
on concerns of slowing global economic growth that could crimp
commodity demand. But losses have been limited by a shortfall in
soybean supply thanks to drought in the U.S. Midwest.
    "I think market is expecting a higher inventory in
September. My view is that production should continue to outpace
exports," said Kenanga Investment analyst Alan Lim.
    "Seasonally September is a higher production month than
August. I think production should be higher by at least 10
percent and it's possible that stocks level go above 2.2 million
tonnes," he added.
    By the midday break, the benchmark November contract
 on the Bursa Malaysia Derivatives Exchange slipped 0.9
percent to close at 2,894 ringgit ($942) per tonne. Prices on
Tuesday had fallen to 2,874 ringgit, the lowest level since Aug.
15.
    Total traded volume stood at 14,104 lots of 25 tonnes each,
higher than the usual 12,500 lots.
    Reuters technicals market analyst Wang Tao said palm oil is
likely to drop to 2,869 ringgit per tonne, driven by a downward
wave. A rebound from the current level will be limited to 2,947
ringgit.
    Palm oil stocks in August surged to a 10-month high of 2.1
million tonnes, exceeding market expectations, the Malaysian
Palm Oil Board (MPOB) said earlier in the week.
    While production is expected to be stronger, cargo surveyors
have pointed to stronger demand this month. For the first ten
days of September, Malaysian palm oil exports jumped more than
30 percent as the country shipped out more crude to India thanks
to a bigger tax free quota of the grade.
    India's palm oil imports in the new marketing year will rise
7.9 percent to 7.5 million tonnes as the world's top edible oil
buyer struggles to meet demand due to faltering local oilseed
output, an industry official told Reuters.
    Brent crude was steady on Wednesday after four days of
gains, staying above $115 a barrel as investors remained
cautiously optimistic a German court would approve the legality
of the euro zone's bailout fund.
    In other vegetable oil markets, U.S. soyoil for December
delivery rose 0.7 percent with some traders expecting the
U.S. Department of Agriculture to slash soybean production
estimates following a crop-damaging historic Midwest drought.
    The most active January 2013 soyoil contract on the
Dalian Commodity Exchange fell 0.4 percent.