Palm oil tracks drop in Dalian; market waits for MPOB data

Malaysian palm oils futures continued to fall for a second session in a row on Tuesday. This was due to the weakness of the Dalian market, and traders were waiting for the monthly report from the Malaysian Palm Oil Board.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for February delivery was down 33 Ringgit or 0.81% at 4,060 Ringgit ($986.39) per metric ton.

A Kuala Lumpur based trader stated that "Futures were under selling pressure as they tracked the Dalian and awaited tomorrow's MPOB, which based on forecasts should show higher stock levels."

A survey found that Malaysian palm oil inventories rose to more than a six-and-a half-year high in November, as exports plummeted amid record production.

The rising?inventory in the world's second-largest producer of tropical oil could have an impact on Malaysian benchmark futures.

Dalian's palm oil contract fell 1.53%, while the most active soyoil contract decreased by 0.87%. Chicago Board of Trade soyoil fell by 0.25%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price movements of competing edible oils.

The Malaysian Ringgit, the palm industry's trade currency, fell 0.15% in value against the U.S. Dollar, making it cheaper for holders of foreign currencies.

Indonesia will require that natural resource exporters retain their 'all foreign currency earned in state-owned bank for at least a year, and then limit the use of those earnings starting January 1, according to officials from the finance ministry.

According to technical analyst Wang Tao, the palm oil FCPOc3 could extend its losses to 4,056 Ringgit per metric tonne, due to a wave c. $1 = 4.1160 Ringgit (Reporting and editing by Sonia Cheema; Dewi Kurniawati)

(source: Reuters)