Malaysian palm oil futures fell in trade on Thursday evening on the back of a technical correction, dropping from their highest in a month hit during the previous session. Expectations of rising inventories also weighed on the market, according to a trader from Kuala Lumpur.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.8 percent to 2,585 ringgit ($645.44) a tonne at the end of the trading day, its first fall in three days and its sharpest daily slide in two weeks. Palm, however, is still up 3.3 percent for the week so far, after surging nearly 3 percent in the previous trading session on expectations of improving demand.
Trading volumes stood at 70,179 lots of 25 tonnes each on Thursday evening. "The market is seeing some profit-taking ... Today it is undergoing a correction after yesterday," said a Kuala Lumpur- based trader, referring to Wednesday's gain.
The trader also said inventories at the end of December were expected to be higher than those reported the previous month. Stockpiles had already risen to the highest level in nearly two years in November, up 16 percent to 2.56 million tonnes, according to data from the Malaysian Palm Oil Board (MPOB). Official data for December will be released on January 10 by the MPOB.
In other related oils, the March soyabean oil contract on the Chicago Board of Trade was slightly down 0.1 percent, while the May soyabean oil on the Dalian Commodity Exchange was up 0.9 percent.
The Dalian January palm oil contract gained 0.7 percent. Palm oil prices track the performance of other edible oils, as they compete for a share in the global vegetable oils market.
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