Palm extends losses on rising stocks, soyoil weakness
Updates with closing prices, adds July exports
By Rajendra Jadhav
MUMBAI, July 10 (Reuters) -Malaysian palm oil futures extended losses on Wednesday as inventories rose to a four-month high in June and due to weakness in soyoil, even though an increase in July exports limited the downside.
The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange was down 41 ringgit, or 1.04%, to 3,918 ringgit ($833.97) a metric ton, after losing 2% on Tuesday.
"Palm oil stocks have been rising at a time when prices of other edible oils are dropping," a Mumbai-based trader said.
"This increases difficulties for producers as they cannot reduce stocks without offering discounts to compete with soyoil and sunflower oil."
Malaysia's palm oil stocks at the end of June rose 4.35% to 1.83 million metric tons from the previous month, according to data released by the industry regulator.
Crude palm oil production in June declined 5.23% from May to 1.62 million tons, while palm oil exports plunged 12.82% to 1.21 million tons, the Malaysian Palm Oil Board (MPOB) said.
U.S. soyoil futures BOcv1 were down 0.22% after losing 4% on Tuesday. China's most active soyoil futures DBYcv1 fell 3% on Wednesday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The recent price correction is boosting demand from price-sensitive markets such as India and China, which is reflected in the exports of the first ten days of July, a New Delhi-based trader said.
Exports of Malaysian palm oil products for July 1-10 rose by 82.1% to 85.9% compared with a month ago, cargo surveyors said on Wednesday.
Palm oil may extend losses to 3,830 ringgit per metric ton, according to Reuters market analyst Wang Tao.
Crude palm oil prices are expected to remain supported by tighter production conditions and strong demand from top buyers India and China, state agency Malaysian Palm Oil Council (MPOC) said.
($1 = 4.6980 ringgit)
Reporting by Rajendra Jadhav; Editing by Eileen Soreng, Sonia Cheema and Shounak Dasgupta
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