Malaysian palm oil futures fall

Malaysian palm oil futures fall

KUALA LUMPUR (Reuters): Falls in Chicago Board of Trade (CBOT) Project A screen trading wiped out earlier gains by Malaysian palm oil futures on Monday while August 1-10 export figures failed to remove worries about rising stocks in the coming months, traders said.

The benchmark third-month November futures contract ended down five ringgit at 987 ringgit (US$259.73) ton after trading as high as 1,004 ringgit on Friday's rises in Chicago.

Volume indicated heavy liquidation.

"Exports may have risen, but the amount is very small," said one trader in Kuala Lumpur.

"Immediate support should stand at 980 ringgit tomorrow because I am sure the market will break the 985 level. I see resistance at 1,000 ringgit," he added.

SGS said Malaysian palm oil exports for the first 10 days of September were at 231,270 tons against 158,054 tons in the same period in August.

Earlier, cargo surveyor ITS estimated Malaysia's palm oil exports for the first 10 days of September at 211,214 tons against 125,389 tons for the same period in August.

Traders said Malaysia's decision to allow seven firms to export 500,000 tons of CPO duty-free would not help boost prices due to prospects of rising output.

They also consider the amount too small to counter a move by Indonesia, the world's second largest palm oil producer after Malaysia, to eventually cut the CPO export tax to zero.

Indonesia's Trade and Industry Minister Luhut Pandjaitan said on Monday Finance Minister Prijadi Praptosuhardjo would sign a decree on Tuesday cutting export taxes on crude palm oil to 5 percent from 10 percent.

Pandjaitan said he would seek to have the CPO export tax eventually cut to zero.

Malaysia's Primary Industries Minister Lim Keng Yaik was quoted by the national Bernama news agency as saying on Sunday the government had selected seven companies to be allowed to export CPO tax free.

Bernama quoted Lim as saying the Finance Ministry agreed to an initial export of 500,000 tons of crude palm oil duty-free to India and Europe over the next six months. The agency did not say how much each company could export per month.

Sept (south) crude palm oil was offered at 955 ringgit a ton against bids of 950. Trade was reported at 955. Sept (central) traded at 950 to 955.

Oct (south) crude palm oil was offered at 980 ringgit a ton against bids of 977, and trade was reported at 980. Oct (central) was offered at 980 ringgit against bids of 975. Trade was reported at 975 to 980 ringgit.

Among refined products, Sept RBD palm oil was offered at $270 a tonne FOB, Oct at $272.50 and Nov/Dec at $280.

There were offers for Sept RBD palm olein at $290, Oct at $292.50 and Nov/Dec at $300.

Sept RBD palm stearin was offered at $205 and Oct at 207.50. Sept/Oct palm fatty acid distillate was offered at $175.