21/06/2011 (Palm Oil HQ) - Crude palm oil futures on Malaysia’s derivatives exchange ended marginally lower Monday, as rising global vegetable oils supply and concerns about euro-zone debt woes outweighed improving export demand for palm oil.

The benchmark September contract on the Bursa Malaysia Derivatives ended 0.2% lower at MYR3,193 a metric ton, after trading in a narrow MYR3,189-MYR3,221/ton range.

Concerns about the ability of euro-zone members to come up with a credible plan to deal with Greece's debt and fiscal problems contributed to widespread weakness in crude oil and other commodities markets.

Palm oil sentiment remained bearish as the market was unable to shrug off persistent concerns about rising stockpiles despite higher exports.

Cargo surveyor Intertek Agri Services estimated that June 1-20 palm oil exports rose 22% from the first 20 days of the previous month to 969,804 tons. Another surveyor, SGS (Malaysia) Bhd., pegged the figure at 973,211 tons, up 19% from May 1-20.

"Exports are decent, but I'm not convinced there will be a significant drawdown in stocks as production is up," said a commodities broker in Kuala Lumpur.

Traders expect exports ti remain high at least until mid-July, due to a wide discount between refined palm olein and rival soyoil, and because some countries are building cooking oil stocks ahead of the Islamic fasting month that begins early in August.

Refined palm olein for prompt shipment from Malaysia is currently offered $90/ton cheaper than crude soyoil from Argentinian ports, according to physical market data.

Separately, open interest in BMD's palm oil contracts rose to a record Monday of 115,257 lots, compared with 114,295 lots Friday, due to "stronger interest in BMD contracts by local and international traders, and increasing hedging activities," the BMD said in a statement.

In the cash market, refined palm olein for July was traded at $1,140/ton, October, November, December shipment at $1,110-$1,112.50/ton and January, February, March at $1,110/ton and $1,112.50/ton, free on board Malaysian ports, a physical market broker in Singapore said.

Rupiah-denominated palm oil for September on the Indonesia Commodity & Derivatives Exchange was trading 1% higher at IDR9,265 a kilogram at 1037 GMT.

Traded volume on the BMD was 24,029 lots compared with 31,798 lots Friday. One lot is equal to 25 tons.