Malaysian palm oil down

Malaysian palm oil futures fell 0.3 percent on Friday as traders took positions on expectations of higher output and lacklustre demand in March. Palm oil lost 5.4 percent this week as prices were pressured by talk of double digit output growth in March early in the week.
Some millers suggested palm oil output in Malaysia's southern Johor state - that makes up 30 percent of total national monthly output - may have jumped 24 percent in the first 20 days of March, as oil palms also move into a higher production cycle.
The higher output expectations come as exports from Malaysia, the world's second largest producer, continue to lag. "I believe exports of this month are not going to be higher than 1.15 million tonnes, we need higher demand to reduce the end-stocks," said another trader in Kuala Lumpur.
Benchmark June crude palm oil contract on the Bursa Malaysia Derivatives fell 0.3 percent to 3,261 ringgit ($1,076.948) per tonne after it went through a technical correction the previous session. Overall traded volume stood at 31,114 lots of 25 tonnes each, more than doubled from the usual 15,000 lots.
Cargo surveyor Intertek Testing Services on Friday said exports of palm oil for March 1-25 fell 3.7 percent to 937,591 tonnes. Another cargo surveyor Societe Generale de Surveillance showed palm oil exports during the same period fell 0.3 percent.
"The market is likely to trade in a tight range for the next few days, players are waiting for fresh news," said another trader in Kuala Lumpur. A Reuters analysis showed Malaysian palm oil could have completed a deep correction at 3,967 ringgit per tonne, based on its daily candlestick pattern and a descending wedge pattern.
Firmer crude oil also capped downside of palm oil, which can be used as a biofuel that competes with crude oil, as turmoil flared in the Middle East heightened worries of supply disruptions. "In the short term, crude oil is going to be the supportive factor for the market," said the second Kuala Lumpur trader. Brent crude steady near $116 in Asian trade hours, ahead of protests planned in Bahrain, heading for a third straight weekly gain.