The benchmark January contract on the Bursa Malaysia Derivatives ended MYR18 lower at MYR2,190 a metric ton, after trading in a range of MYR2,183-MYR2,221/ton.Malaysia's palm oil stocks likely rose to a nine-month high last month as the palm oil sector entered its peak production season, while an increase in exports did little to offset the increased output, plantation company officials and traders said.
Stock levels likely increased to between 1.75 million and 1.80 million tons as of the end of October, they said.
In contrast, stock levels at the end of September stood at 1.58 million tons, according to estimates by the Malaysian Palm Oil Board. The MPOB is expected to issue on Nov. 10 data on Malaysia's October palm oil production, exports and end-month stocks.
Palm oil producers and trade participants contacted by Dow Jones Newswires said Malaysia's palm oil production in October may have risen 17%-20% to between 1.77 million and 1.87 million tons."We're expecting November's production to rise further," a company executive from a major Malaysia-based plantation company said. The peak palm oil production season in Malaysia runs from October-November.
"Prices may remain in a MYR2,100-MYR2,200/ton range," with a bias toward the lower end, if stock levels continue to rise, a senior executive at a Kuala Lumpur-based commodities brokerage said.
Weaker soyoil and crude oil futures also weighed on CPO prices.
By the close of trading on the BMD, Chicago Board of Trade December soyoil futures were down 17 points in afterhours trade at 36.62 cents a pound. New York Mercantile Exchange December crude oil futures were down $0.84 at $77.29 a barrel.
Cash palm olein for April/May/June was traded at $687.50/ton. Cash CPO for prompt shipment was offered MYR10 lower at MYR2,160/ton.
A total of 12,666 lots of CPO was traded on the BMD, versus 18,601 lots Monday.
Open interest stood at 95,266 lots Tuesday, up from 94,956 lots. One lot is equivalent to 25 tons.
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