June 19, 2008	Thursday	Jamadi-us-Sani 14, 1429

KUALA LUMPUR, June 18: Malaysian crude palm oil futures fell on Wednesday as weakening overseas demand and the prospect of higher domestic end-stocks weighed on the market.

But strength in crude oil and firm soyoil markets kept a lid on losses. Palm oil prices are about 18.8 per cent off a record high off a record high of 4,486 ringgit hit in early March.

The benchmark September contract on the Bursa Malaysia Derivatives Exchange ended down 5 ringgit at 3,640 ringgit ($1,118) per ton after going as high as 3,680 ringgit.

With such poor domestic fundamentals, the market should have ideally broken the 3,500-ringgit level but bullish external factors have propped up palm oil, said a trader with a foreign brokerage.

Other traded months ranged between a drop of 2 ringgit to a 35 ringgit increase. Overall trade stood at 9,706 lots at 25 tons each.

Exports for the first 15 days of June have been dismal, with cargo surveyors reporting up to 13 per cent declines at roughly 600,000 tons.

Slow demand has already left an excess of palm oil with local millers and refiners. The Malaysian Palm Oil Board reported last week that palm oil stocks in May rose 6.9 per cent to 1,913,360 tons.

Other traders said the reluctance of crude oil markets to fall below $130 a barrel level despite top exporter Saudi Arabia’s plan to hike output also lent a positive to neutral tone for vegetable oil markets, from Kuala Lumpur to the United States.

US soyaoil for July delivery rose 0.1 per cent, extending small gains made overnight while the most-active September soyaoil contract on China’s Dalian Commodity Exchange fell 0.2 per cent.

In Malaysia’s cash market, crude palm oil for June shipment in the southern and central region was quoted at 3,650/3,660 ringgit. Trades were done between 3,660 and 3,680 ringgit.—Reuters