Palm oil futures listless, rising reserves eyed

Malaysian crude palm oil futures made little headway on Tuesday as firm crude and
soy oil prices clashed with slowing demand amid a high production cycle
for the vegetable oil.

Prices of the vegetable oil, which fell
more than 5 percent last week, have been meandering on a lack of fresh
news, although many traders see the market going lower as stockpiles
are expected to swell above 2 million tonnes this month.

By the
midday break, the benchmark September contract on the Bursa Malaysia
Derivatives Exchange was unchanged at 3,558 ringgit ($1,091) per tonne.

The market cannot move, there is no big news to spice things up," said a trader with a foreign commodity brokerage.

"Demand
is slow, but it is still maintained at 1 million-1.2 million tonnes for
the past few months, the only problem is that production is rising and
stocks will surely bloat."

Other traded months rose marginally. Overall trade shrunk to 1,307 lots at 25 tonnes each from the usual 5,000 lots.

Exports
of Malaysian palm oil products for June 1-20 fell 9.8 percent to
749,776 tonnes from 830,873 tonnes shipped between May 1 and 20, cargo
surveyor Intertek Testing Services said on Friday.

Another surveyor Societe Generale de Surveillance reported declines of 11.2 percent to 754,539 tonnes.

Oil
rose for a third straight session to around $137 a barrel on Tuesday
amid fears of Nigerian supply disruptions and tensions between Israel
and Iran.

Strength in crude oil spilled over to other vegetable
oil markets. Soy oil for July delivery at the Chicago Board of Trade
rose 0.3 percent while the most-active September soy oil contract on
China's Dalian Exchange edged higher.

In Malaysia's cash market,
crude palm oil for June and July shipments in the southern and central
regions was quoted at 3,570/3,580 ringgit. Trades were done at 3,570.