Malaysian crude palm oil down

NEWS DIGEST

Malaysian crude palm oil futures slipped on Tuesday, dragged down by lower crude oil prices overnight and profit-taking.

Dealers said the strong export performance announced by a cargo surveyor failed to impress the market, which many players felt was overbought.

The market had gained nearly 7 per cent in the previous two weeks as traders expected Malaysian palm oil stocks to fall from a record 1.799 million tonne at the end of September following robust exports and a reduction in output due to religious holidays.

"Exports and stocks have already been factored in," one dealer said. By the midday break, the benchmark January contract on the Bursa Malaysia Derivatives was down 21 ringgit at 1,677 ringgit ($460) a tonne.

Other traded contracts fell between 23 and 45 ringgit. Overall volume stood at 10,286 lots of 25 tonne each, up from 4,000 to 5,000 lots traded at the end of the morning session on a normal day. Open interest, which indicates the number of players in the market, rose to 75,583 lots from 50,000 to 60,000 lots on normal days.

Vietnam coffee prices dip

Coffee prices in Vietnam, the world's second-largest producer after Brazil, eased this week as farmers began to sell beans from the new harvest to cash in on high prices, traders said on Tuesday.

"Farmers have already started selling their fresh stocks and we expect a large quantity of new beans from the harvest to hit the market within 10 days," said a trader in Buon Ma Thuot, the capital of top coffee-growing province of Daklak.

LME may launch new mini contracts

The London Metal Exchange wants to introduce new mini contracts in additon to the copper,aluminium and zinc mini-contracts which will begin trading on November 20, exchange officials said on Tuesday.

"We will be monitoring trading activity and it is our intention to launch new contracts as the market develops," Glen Chalkley, head of the LME's Select electronic trading platform,said at a seminar organised by the exchange.

Exchange chief executive Martin Abbott said the LME had not set liquidity targets by which the success of the minis would be judged.

"We have had a lot of interest which suggests we will have a successful launch. If we have the success we are hoping for in these three contracts, we will look at the rest of the suite."

"We'd be foolish if we did not look at the prospect of launching LME mini-options."The mini-contracts are based on the LME's metals futures but do not involve delivering metal into warehouses. They will be electronically traded and, at five-tonnes, one-fifth of the size of the LME's classic contracts.

The other traded metals are lead, nickel, tin, aluminium alloys, along with the exchange's two plastics contracts.

The LME's clearing house LCH.Clearnet has not yet set initial margins for the mini contracts.