DJ Asian Crude Palm Oil Falls To Fresh 2011 Lows On Economic Concerns 09.08.2011
-- Palm oil futures tumble as investors liquidate longs
-- Investors shrug off supportive demand outlook
-- Malaysia's Aug. 1-10 likely reached 505,000-592,000 tons
-- Supply-demand data from cargo surveyors, MPOB due Wednesday
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange hit a fresh low for the year Tuesday as investors fled equities and commodities in droves, amid growing uncertainty about the global economic outlook, trade participants said.
Benchmark October CPO on the Bursa Malaysia slumped in the last five minutes before trade ended as investors liquidated longs, sending prices to a fresh low for the year at MYR2,917 a metric ton.
The contract ended at MYR2,920/ton, down 2.5% from Monday's close.
Agri-commodity markets plunged following sharp losses in crude oil and after the Dow Jones Industrial Average recorded its sixth-biggest point drop overnight in the wake of Standard & Poor's downgrade of U.S. credit ratings.
Investors also shrugged off a supportive outlook for demand, which is tipped to rise 26%-48% during the Aug. 1-10 period to 505,000-592,000 tons.
Traders said exports will be sharply higher in the first half of August as exporters rush to move cargoes before the three-day Eid ul-Fitr Muslim holiday that marks the end of the fasting month.
"The palm oil market is purely driven by macro issues. Until things calm down, there's no urgent reason for any major bargain-buying at the moment," S. Paramalingam, executive director at Kuala Lumpur-based Pelindung Bestari, said.
With weather forecasts looking favorable for U.S. crops, global vegoil markets may be headed for further declines, an analyst at a Singapore-based bank said.
On Wednesday, cargo surveyors are expected to issue Aug. 1-10 export estimates, while the government-linked Malaysian Palm Oil Board will issue July production, stock and export data.
In the cash market, refined palm olein for September was offered $20 lower at $1,120/ton while cash CPO for prompt shipment was offered MYR30 higher at MYR3,150/ton.
Traded volume in crude palm oil futures on the BMD fell to 35,313 lots from 38,986 lots Thursday. One lot equals 25 tons.
Open interest was 129,215 contracts compared with 130,417 contracts.
Closing BMD CPO futures prices in MYR/ton at 1030 GMT: Month Close Previous Change High Low Aug'11 3,110 3,120 Down 8 3,130 3,060 Sep'11 2,970 3,036 Down 43 3,033 2,960 Oct'11 2,920 2,994 Down 57 2,994 2,917 Nov'11 2,895 2,980 Down 64 2,975 2,895