Crude palm oil futures on Malaysia’s derivatives exchange ended lower Monday as higher-than-expected stocks and weaker exports weighed heavily on prices, said trade participants.The benchmark March contract on the Bursa Malaysia Derivatives ended MYR41 lower at MYR2,585 a metric ton, after moving in choppy trade between MYR2,572-MYR2,648/ton.
Malaysia's palm oil stocks at the end of December rose 16% on month to 2.24 million tons, according to the Malaysian Palm Oil Board.
The increase surprised the market, which was expecting stocks to be around 2.0 million tons, said traders.
Although the MPOB said output in December fell by 4.7% to 1.52 million tons, the fall wasn't enough to negate the bearish stock level and weaker exports in December, added the traders.
Exports in December fell 19.5% on month to 1.21 million tons, according to MPOB estimates.Cargo surveyors SGS (Malaysia) Bhd. and Intertek Agri Services also reported weak export estimates for Malaysian palm oil products during the Jan. 1-10 period.
SGS estimated palm oil exports fell 13.3% on month to 346,462 tons, while Intertek reported a 15% fall to 351,818 tons. The market had expected an on-month decline of 15%.
"There were no positive local cues, so participants started selling. Prices would have fallen even lower if not for strong crude oil futures," said a Kuala Lumpur-based trader.
At 1015 GMT, light, sweet crude for February on the New York Mercantile Exchange was trading 81 cents higher at $83.56 a barrel.
In the cash market, palm olein for April/May/June was traded at $825/ton, while July/August/September was at $817.50/ton, free-on-board Malaysian ports, said a Singapore-based broker.Cash CPO for prompt delivery was offered MYR20 lower at MYR2,570/ton.
Open interest on the BMD was 79,823 lots, up from 79,123 lots traded Friday. One lot is equivalent to 25 tons.
A total of 24,564 lots of CPO were traded versus 19,934 lots traded Friday
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