KUALA LUMPUR (Sept 3): Malaysian palm oil futures continued to slide for a second day on Thursday after posting strong gains in three consecutive sessions, as global commodity markets tumbled further.

The benchmark November contract on the Bursa Malaysia Derivatives exchange was at 1,990 ringgit (US$472.01) a tonne by the midday break, after falling a combined 1.4% since its one-week high of 2,019 ringgit on Sept 1.

Traded volume stood at 9,797 lots of 25 tonnes each, less than the average 13,500 lots at the end of the morning session.

"The spread between palm oil and soyoil is still wide, so there is still room for palm to go up. Personally, I don't see palm's downtrend continuing for long," said a Kuala Lumpur-based trader, adding that prices would see further impact from the ringgit's volatility.

"There's uncertainty in the ringgit's direction due to political and economic factors, which will influence palm's prices in the next few months."

Another factor weighing down on palm prices is the concern over China's growth, a top consumer of the vegetable oil.

On the technical front, Reuters market analyst Wang Tao said palm oil will maintain its target of 1,963 ringgit as indicated by its wave pattern and a Fibonacci retracement analysis.
 
In other vegetable oil markets, the Dalian palm oil for January was down 0.6%. The most active January soybean oil contract on the Dalian Commodity Exchange was down 0.3%. The U.S. December soyoil contract was up 0.1% in Asian trade.   

Oil prices fell on Thursday due to an unexpected build up in U.S. crude inventory and a stronger dollar, but was supported by a recovery in Asian shares after Wall Street posted near 2% gains overnight.

Palm oil often takes price direction from crude oil, due to the increasing use of vegetable oils in making renewable fuels.
    
  Palm, soy and crude oil prices at 0519 GMT
                                                                       
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      SEP5       0    +0.00       0       0      10
  MY PALM OIL      OCT5    1954    +0.00    1945    1956     266
  MY PALM OIL      NOV5    1990    +1.00    1977    1994    4892
  CHINA PALM OLEIN JAN6       0    +0.00       0       0       0
  CHINA SOYOIL     JAN6       0    +0.00       0       0       0
  CBOT SOY OIL     DEC5   27.11    +0.20   27.10   27.30    1731
  INDIA PALM OIL   SEP5  375.70    +0.20  375.50  377.00     130
  INDIA SOYOIL     OCT5  571.95    -0.40  571.80  574.00    4545
  NYMEX CRUDE      OCT5   45.97    -0.28   45.65   46.35   12637
                                                                       
  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
 
($1 = 4.2160 ringgit)
($1 = 66.2550 Indian rupees)
($1 = 6.3633 Chinese yuan)