Malaysian palm oil futures slipped on Wednesday after analysts expected the market to fall further on high stocks although traders were betting on the edible oil's big discount to competing soyoil to spur demand. Palm oil futures have lost 22 percent this year, prompting one analyst at an industry seminar the previous day to forecast prices falling to 2,200 ringgit in the next four to six weeks on a record build-up in Malaysian stocks. Exports in the first half of October have climbed as much as 16.3 percent from a month ago, signalling strong buying interest from the likes of the European Union and Pakistan, data from a cargo surveyor showed. "The market is digesting all the news and views spoken yesterday, it will remain rangebound until more is known about demand," said a trader with a local commodities brokerage in Malaysia.
By the midday break, the benchmark January contract on the Bursa Malaysia Derivatives Exchange slipped 0.2 percent to 2,461 ringgit ($808) per tonne. Total traded volumes stood at 16,373 lots of 25 tonnes each, slightly higher than the usual 12,500 lots. Technical analysis showed that palm oil remained neutral, trapped in a range of 2,361-2,528 ringgit per tonne, said Reuters analyst Wang Tao. Another trader with a foreign commodities brokerage said the upcoming U.S. presidential elections have made global investors more cautious. On Tuesday, U.S. President Barack Obama and Republican rival Mitt Romney clashed repeatedly on jobs and energy. While market reaction in Asia has been muted, U.S. investors are likely to focus on the outcome as it gives an idea on the kind of economic and financial policies that may come into the play after the polls. "The U.S markets are quiet because of the presidential election next month, so people are watching carefully. That's why the (palm oil) market can't move," the Malaysian trader said. Palm oil takes its cues mostly from U.S. soyoil and Brent crude, as it competes with the edible oil for food demand and the crude oil grade for use in the energy sector. Brent futures held steady near $114 on Tuesday as expectations that Europe's financial crisis is on the mend renewed hopes of a revival in oil demand growth, while simmering tension in the Middle East provided additional support. U.S. soyoil for December delivery inched up 0.2 percent in early Asian trade after declining in the previous session on expectations of higher soybean supplies in the Americas. The most active January 2013 soybean oil contract on the Dalian Commodity Exchange was almost flat.