* Weaker soyoil markets narrow spread between palm oil to
* U.S. government shutdown leaves traders in the dark
* Palm oil remains neutral in 2,265-2,332 ringgit range
By Anuradha Raghu
KUALA LUMPUR, Oct 2 (Reuters) - Malaysian palm oil futures
ended lower on Wednesday, tracking weak soy markets, as
investors fretted about surging global supply of the competing
oilseed that could snatch demand away from the tropical palm.
U.S. soybeans traded near a 19-month low in the wake of a
government agricultural report that showed larger-than-expected
existing supplies as well as improving weather conditions for
Larger supplies of soybeans for crushing into soyoil could
channel food and fuel demand away from palm oil. The drop in soy
oil prices have also narrowed palm oil's discount to the rival
vegetable oil, traders said.
"Soybean and soybean oil prices have touched new lows and
dragged our market down," said a trader with a foreign
commodities brokerage in Malaysia.
"For the past week the spread between crude palm oil and soy
has narrowed to $175 per tonne. All the while it has been above
$200," the trader added.
By Wednesday's close, the benchmark December contract
on the Bursa Malaysia Derivatives Exchange had edged
down 0.7 percent to 2,312 ringgit ($710) per tonne. Prices
traded in a range of 2,303-2,334 ringgit.
Total traded volumes stood at 35,439 lots of 25 tonnes each,
right at the average 35,000 lots.
Technicals showed that signals remain neutral for Malaysian
palm oil and will become clearer when the contract
gets out of a range of 2,265-2,332 ringgit per tonne, Reuters
market analyst Wang Tao said.
The shutdown of the U.S government, which includes the U.S.
Department of Agriculture, due to a budget impasse also weighed
on agricultural markets as many traders rely on USDA reports for
key information on crop conditions and export
In other markets, Brent crude oil extended losses below $108
a barrel on signs of improving global supply and expectations
that U.S. oil stockpiles are beginning to build.
In competing vegetable oil markets, the U.S. soyoil contract
for December edged down 1.02 percent in late Asian trade.
The Dalian Commodities Exchange is closed for a holiday and will
reopen on Oct. 8.
Palm, soy and crude oil prices at 1026 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2356 -12.00 2350 2367 492
MY PALM OIL NOV3 2316 -14.00 2308 2338 2959
MY PALM OIL DEC3 2312 -17.00 2303 2334 21720
CHINA PALM OLEIN JAN4 5384 -2.00 5370 5418 230740
CHINA SOYOIL JAN4 6960 -52.00 6934 7008 359152
CBOT SOY OIL DEC3 39.87 -0.40 39.82 40.33 9351
NYMEX CRUDE NOV3 101.75 -0.29 101.43 101.82 10965
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1 = 3.2345 Malaysian ringgit)
(Editing by Tom Hogue)
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