In The News - 30/11/2005

Malaysian crude palm oil futures closed down on Wednesday, reversing a firm trend at the midsession, on fears that poor demand through November could

leave the physical market with its highest ever stocks of oil.

A Reuters poll of leading plantation houses showed that inventories of both crude and refined palm oil could be as high as 1.6 million tonnes by end of this month -- up 6.9 percent from end-October. 

The bleak outlook was backed by data from Societe Generale de Surveillance, the market's leading surveyor of palm oil shipments, showing a possible drop of 17 percent in November exports from October.

"It's bad news as far I can see," said a trader. "I'm surprised the market didn't get whacked harder." 

At the close, the third-month palm contract on Bursa Malaysia Derivatives, February <KPOG6>, was down 0.4 percent, or 5 ringgit, at 1,391 ringgit ($368.67) a tonne.

It had risen as much as 7 ringgit earlier to an intraday high of 1,403.

The benchmark ontract broke the long-defended support of 1,400 ringgit on Monday after a sell-off in rival U.S. soyoil.

Wednesday's futures trade totalled 4,589 lots of 25 tonnes each, hardly different from Tuesday's 4,485 lots. But it was still lower than the 6,000 lots achievable on a busy day.

December soyoil <BOZ5> on the Chicago Board of Trade fell 0.29 cent a lb on Tuesday, and another 0.19 cent in Wednesday's electronic trade <0#ZL:>, conducted during day hours in Asia.

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