Palm oil falls on weaker soyoil, seen range-bound

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KUALA LUMPUR (Jan 19): Malaysian palm oil futures fell for a second consecutive session on Thursday, hit by weaker US soyoil and a failure to break the previous session's intraday high, dealers said, forecasting further range-bound trading, pending new leads.

Benchmark palm oil futures for April delivery on the Bursa Malaysia Derivatives Exchange were down 0.6% at RM3,131 (US$704) a tonne at the end of the trading day.

Traded volumes stood at 41,828 lots of 25 tonnes each on Thursday evening.

"The market's technicals are not good, it couldn't break yesterday's high of RM3,175," said a trader from Kuala Lumpur.

"People could also be wanting to liquidate their position because of Trump," he said, referring to the US President-elect's inauguration on Friday and concerns about his policies.

Palm was down earlier in the day on the back of weaker US soy. Palm prices often track the movements of related edible oils as they compete for a share in the global vegetable oils market. The March soybean oil contract on the CBOT is down by 0.2%.

Despite the decline, palm is still near a more-than-four-year high on tight market supplies, as production levels are still reeling from the effects of the crop-damaging El Nino.

Traders and analysts expect output to remain slow until the second or even third quarter of the year.

Malaysian output for the year, however, is seen rising 12% to 19.4 million tonnes from 2016, as the trees recover from dry weather, according to the Malaysian Palm Oil Board.

In other related edible oils, the May soybean oil contract on the Dalian Commodity Exchange climbed 0.1%, while the May contract for Dalian palm olein declined 0.2%.

Palm, soy and crude oil prices at 1046 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       FEB7     3243   -2.00    3231    3254     487
MY PALM OIL       MAR7     3169  -16.00    3166    3203    7045
MY PALM OIL       APR7     3131  -19.00    3130    3171   21405
CHINA PALM OLEIN  MAY7     6306  -10.00    6268    6348  431558
CHINA SOYOIL      MAY7     7010   +4.00    6992    7070  355212
CBOT SOY OIL      MAR7    35.53   -0.06   35.44    35.7    5886
INDIA PALM OIL    JAN7   592.50   -2.80  591.20   595.7     644
INDIA SOYOIL      JAN7    733.4   +0.15     733     734     960
NYMEX CRUDE       FEB7    51.42   +0.34   51.24   51.81    8862

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 = RM4.4470)
(US$1 = 68.1625 Indian rupees)
(US$1 = 6.8630 Chinese yuan)