Malaysian palm oil futures charted a third session of loses in four on Thursday evening, tracking weakness in overnight U.S. soy oil prices and on forecasts of slower-than-expected declines in output.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 0.6% at 2,157 ringgit (US$521.77) a tonne at the close of trade, after earlier rising to a three-day top of 2,179 ringgit.
"Front-month palm prices are under pressure on production outlook," said a Kuala Lumpur-based trader, adding that this caused palm prices to fall in early trade.
"The market is still sideways, waiting for fresh direction".
Another trader said overnight declines in soy oil prices on the U.S. Chicago Board of Trade weighed on palm oil prices, while a weaker ringgit limited the fall.
"Due to soy's prices, Malaysia's export data had no effect", he said.
Malaysian palm oil exports rose between 1.4%-8.9% during April 1-25 versus the corresponding period last month, according to data from three cargo surveyors on Thursday.
Weakness in the ringgit, palm oil's traded currency, usually makes the edible oil cheaper for foreign buyers. The ringgit was down 0.2% at 4.1340 per dollar.
In other related oils, the Chicago May soybean oil contract fell 0.5% on Wednesday, and was up 0.3% on Thursday.
Soybean prices had declined on ample global supplies and dimming prospects for U.S. exports.
The May soy oil contract on the Dalian Commodity Exchange fell 0.2%, and the Dalian May palm oil contract was down 0.3%.
Palm oil prices are affected by movements in soy oil, as they compete for a share in the global vegetable oil market.
Palm, soy and crude oil prices at 1040 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY9 2050 -29.00 2050 2078 230
MY PALM OIL JUN9 2129 -21.00 2129 2156 3631
MY PALM OIL JUL9 2157 -13.00 2156 2179 15578
CHINA PALM OLEIN MAY9 4314 -12.00 4310 4338 29018
CHINA SOY OIL MAY9 5276 -10.00 5268 5294 34172
CBOT SOY OIL MAY9 28 +0.08 27.9 28 1803
INDIA PALM OIL APR9 539.20 +1.00 537.80 539.6 582
INDIA SOY OIL MAY9 747.55 +4.15 738.8 748.5 10530
NYMEX CRUDE JUN9 66.14 +0.25 65.54 66.28 119714
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
(US$1 = 4.1340 ringgit)
(US$1 = 70.2025 Indian rupees)
(US$1 = 6.7438 Chinese yuan)
Source: The Edge Markets