20121204 1616 Palm Oil Related News.

VEGOILS-Record stocks drag palm oil futures to new 3-week low
Tue Dec 4, 2012 12:52am EST
* Futures market technically weak -trader
    * Palm oil to revisit low of 2,220 ringgit-technicals
    * November exports to rise on stronger Chinese demand
-analyst

 (Updates prices, adds detail)
    By Anuradha Raghu
    KUALA LUMPUR, Dec 4 (Reuters) - Malaysian palm oil futures
fell to its lowest in more than three weeks on Tuesday as
investors fret over the prospects of another  month of record
stocks in the world's No.2 producer.
    Forward months were trading at a 3 percent discount to the
benchmark February futures contract, signalling oversupply and
keeping investors on edge although seasonally slowing output and
Chinese demand should curb the stock build.
    Record high stocks in Indonesia and Malaysia will see palm
oil futures post their worst annual performance since the
financial crisis in 2008. Palm oil prices have lost nearly 28
percent so far this year also on the deepening euro zone debt
crisis affecting global economic growth.
    "There is plentiful stock around -- that's the reason why
the market is still technically weak. The local front is
bearish," said a trader with a foreign commodities brokerage.
    "Exports are holding quite well, the demand is still strong.
But unless you see a draw down in inventory, the market will be
under pressure," he added.
    The benchmark February contract on the Bursa
Malaysia Derivatives Exchange fell as much as 2,289 ringgit per
tonne, the lowest since Nov. 12, before settling at 2,294
ringgit ($754) per tonne by the midday break.
    Total traded volumes stood at 16,998 lots of 25 tonnes each,
much higher than the usual 12,500 lots.  
    Technicals showed that palm oil would revisit its Nov. 12
low of 2,220 ringgit per tonne, said Reuters market analyst Wang
Tao.
    Malaysian crude palm oil exports are expected to rise in the
next few weeks thanks to stronger demand from China ahead of
Lunar New Year celebrations in February, and stricter import
rules next year.
    "We have assumed crude palm oil exports to increase by 5
percent to 1.85 million tonnes in November as Chinese traders
are expected to stock up," Kenanga Investment Bank analyst Alan
Lim said in a note to clients.
    Kenanga expects inventory levels to "remain close to the
very high level of 2.5 million tonnes" and keep crude palm oil
prices below 2,500 ringgit in the near term.
    Weak manufacturing data from the United States renewed
concerns of slowing demand from the world's biggest oil
consumer, offsetting optimistic factory data issued by China a
day earlier.
     Brent futures slipped below $111 per barrel on Tuesday but
supply worries stemming from simmering tensions in the Middle
East and worsening unrest in Syria helped cushion prices.
    In palm oil's competing markets, U.S. soyoil for December
delivery was almost flat in Asian trade. The most active
May 2013 soybean oil contract on the Dalian Commodity.