Palm oil charts sharpest daily drop in nearly two weeks

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KUALA LUMPUR (March 23): Malaysian palm oil futures on Thursday registered their sharpest daily fall in nearly two weeks, weighed down by weaker-performing related edible oils and a technical sell-off.

Benchmark palm oil futures for June delivery on the Bursa Malaysia Derivatives Exchange fell 2.1% to RM2,771 (US$625.93) a tonne, retreating from the near two-week high of RM2,839 hit in the previous session.

Traded volumes stood at 51,723 lots of 25 tonnes each at the end of the trading day.

"The overseas market is weaker and there has been some technical selling since prices are unable to climb to new highs today," one Kuala Lumpur-based futures trader said, referring to related vegetable oils on China's Dalian Commodity Exchange and the Chicago Board of Trade.

Palm oil prices are affected by the performances of competing edible oils in the global vegetable oils market. Soybean oil on the Chicago Board of Trade slipped as much as 0.8%, while the September soybean oil contract on the Dalian Commodity Exchange fell by up to 1.7%.

The September contract for palm olein on the Dalian Commodity Exchange dropped by as much as 2%.

Palm oil has been trading range-bound for the past two weeks as slow export demand and uncertainty over output affected sentiment, traders said.

Exports of palm oil products from Malaysia, the world's second-largest producer of the tropical oil, dropped between March 1 and March 20 compared with the corresponding period last month.

Cargo surveyor Intertek Testing Services reported a 3% drop in shipments, while Societe Generale de Surveillance saw a decline of 7.9%.

There are usually seasonal gains in March, but industry players remain uncertain about the extent of recovery. Palm oil trees are still suffering the effects of a crop-damaging El Nino weather event, which reduces yields of fresh fruit bunches and lowers overall output.         

Palm, soy and crude oil prices at 1032 GMT

Contract         Month    Last   Change     Low    High  Volume
MY PALM OIL      APR7     2934   -42.00    2922    2975     372
MY PALM OIL      MAY7     2838   -56.00    2832    2899    3811
MY PALM OIL      JUN7     2771   -58.00    2763    2834   27456
CHINA PALM OLEIN       SEP7     5540  -114.00    5534    5670  681240
CHINA SOYOIL     SEP7     6402  -108.00    6398    6498  527282
CBOT SOY OIL     MAY7    33.27    -0.25    33.2   33.55   12565
INDIA PALM OIL   MAR7   535.80    +0.60  531.60   536.5     580
INDIA SOYOIL     APR7    651.3    +3.90     648  652.25   22410
NYMEX CRUDE      MAY7    48.33    +0.29   48.12   48.48   70962

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel

(US$1 = RM4.4270)
(US$1 = 65.5100 Indian rupees)
(US$1 = 6.8861 Chinese yuan)