Palm oil lower

Malaysian palm oil futures gave up early gains to end lower on Wednesday after a growers' group unexpectedly forecast February yields to pick up. Sentiment was further dampened by weak export data and a stronger ringgit. The Malaysian Palm Oil Association estimates that crude palm oil production from February 1-20 rose 4.5 percent in Malaysia, the second biggest producer, as weaker yields in the Borneo region were offset by a recovery in Peninsular Malaysian estates.
Market players had expected output to drop up to 12 percent for the whole month. Official data is due on March 10. The benchmark May contract on the Bursa Malaysia Derivatives Exchange dropped 0.5 percent to 2,246 ringgit ($623) per tonne by Wednesday's close. Trading was choppy between 2,242 ringgit and 2,276 ringgit. "There's high production talk, and the Malaysian ringgit was stronger versus in the morning," said a trader with a foreign commodities brokerage in Kuala Lumpur.
The Malaysian ringgit gained 1 percent to 3.6035 in late Wednesday trade, making ringgit-priced feedstock more expensive for overseas buyers. Poor demand also kept a lid on prices. Cargo surveyor Intertek Testing Services reported on Wednesday a 6.6 percent fall in Malaysian shipments of palm oil between February 1 and 25 versus the same period in January, due to a steep decline in Chinese imports.Another cargo surveyor, Societe Generale de Surveillance, reported a 7.1 percent fall for the same period.
Traded volume on Wednesday stood at 51,476 lots of 25 tonnes each, much higher than the usual 35,000 lots. Traders said sentiment was uncertain, with most looking to an industry meeting in Kuala Lumpur next week for more clarity on the global market scene. In competing vegetable oil markets, the US soyoil contract for May rose 0.4 percent. Soybean prices slid from a six-week top in the previous session on expectations that Brazilian authorities will soon take action to end a trucker strike that has disrupted the harvest of a record soy crop. The most active May soybean oil contract on the Dalian Commodity Exchange fell 0.9 percent on the first session of trading after the Lunar New Year holidays.