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Palm extends losses on stockpile worries

By Reuters News

KUALA LUMPUR, Nov 3 (Reuters) - Malaysian palm oil fell for a second straight session on Tuesday, amid growing stockpile worries as traders watched soyoil and crude oil prices for further cues.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 33 ringgit, or 0.71%, to 4,616 ringgit ($1,133.60) a metric ton by the midday break.

Palm oil futures remained cautious and traded lower as concerns over elevated inventories continued to limit gains, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

"We expect prices to remain rangebound in the afternoon session, with support around 4,600 ringgit and resistance at 4,800 ringgit, as traders monitor soybean oil and crude oil prices for further direction," he added.

Dalian's most-active soyoil contract fell 1.3%, while its palm oil contract shed 0.5%. Soyoil prices on the Chicago Board of Trade were up 0.09%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices edged up after a report that the United States had struck Iran's Qeshm Island, raising concerns about an escalation of the eight-month conflict and prolonged disruptions to Middle East oil supplies. O/R

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit , palm's currency of trade, weakened 0.12% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Cargo surveyors estimated that exports of Malaysian palm oil products for October rose between 45.4% and 73.5% from a month earlier.

Palm oil may revisit a low of 4,597 ringgit per ton, after failing to break a resistance at 4,688 ringgit, Reuters technical analyst Wang Tao said. TECH/C

($1 = 4.0720 ringgit)


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