Palm oil lower on higher end-stocks

KUALA LUMPUR: Malaysian palm oil futures ended lower on Tuesday after a key industry report showed end-stocks in the world's second-largest producer had climbed to their highest in eight months, while weak exports dampened investor sentiment. 
    Inventories at end-November rose to 1.98 million tonnes, from 1.85 million
tonnes in October, industry regulator the Malaysian Palm Oil Board (MPOB) said,
as seasonally weaker output did little to offset a lull in exports last month.
 
    Demand for palm oil could decline further in December as top consumers cut
back purchases of the tropical oil that solidifies in winter, but investors
expect palm-damaging monsoon floods to tighten supplies and support prices. 
    Exports of Malaysian palm products from Dec. 1-10 plunged 20 percent from
last month, cargo surveyor Intertek Testing Services reported. Another cargo
surveyor, Societe Generale de Surveillance, showed exports fell 26.1 percent in
the same period.  
    "The price ended a tad lower because there was some sell-off after the
stocks report," said a trader with a local commodities brokerage in Malaysia. 
    "The worry now is that December exports won't be that good, but production
for the past few days has also been very bad. So whenever prices move to 2,600
ringgit, they bounce back," the trader added.    
    The benchmark February contract on the Bursa Malaysia Derivatives
Exchange had edged down 0.3 percent to 2,638 ringgit ($822) per tonne by
Tuesday's close. Prices were choppy in a range of 2,627-2,664 ringgit.
    Total traded volume stood at 36,776 lots of 25 tonnes, slightly above the
average 35,000 lots.      
    Severe flooding in several parts of Peninsular Malaysia, which forced about
60,000 people to be evacuated, triggered fears of tighter supplies of the edible
oil and propped up palm prices.
    Malaysia's Metrological Department on Tuesday issued warnings of
thunderstorms and heavy rain over the palm-growing states of Perak and Pahang
that could cause floods in low-lying areas.
    Floods disrupt harvesting and transportation of fresh fruit, and could
damage the quality of palm oil.
    "The weather is still bad. There's not much oil available and we could even
see a double-digit drop in production in December," the trader added. 
    In other markets, Brent crude oil rose above $110 a barrel on Tuesday,
recouping some of the previous session's losses - the sharpest in over five
weeks.           
    In competing vegetable oil markets, the U.S. soyoil contract for January
 rose 0.2 percent in late Asian trade. The most-active May soybean oil
contract on the Dalian Commodities Exchange was flat.
    
  Palm, soy and crude oil prices at 1038 GMT
                                                                                                               
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      DEC3    2620    -6.00    2610    2620      80
  MY PALM OIL      JAN4    2626    -6.00    2615    2651    2699
  MY PALM OIL      FEB4    2638    -6.00    2627    2664   17816
  CHINA PALM OLEIN MAY4    6242    +0.00    6190    6256  888952
  CHINA SOYOIL     MAY4    7228    -2.00    7184    7232  581402
  CBOT SOY OIL     JAN4   40.42    +0.20   40.21   40.50    5628
  NYMEX CRUDE      JAN4   98.63    +1.29   97.24   98.74   22624
                                                                                                               
  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=3.21 Malaysian ringgit)- Reuters