Malaysian palm oil futures fell 1.2 percent on Thursday as traders booked profit on concerns that lower-than-expected exports data and high production could lead to record stocks. Although cargo surveyors reported Malaysia's palm oil exports in June rose above 1.4 million tonnes - representing a six percent growth from May - output is likely to rise at much faster pace thanks to favourable weather.
"If we compare exports for the first 25 days and the full month, the difference is small. It indicates exports has slowed down at the end of the month," said a trader in Kuala Lumpur. The benchmark September crude palm oil contract on Bursa Malaysia Derivatives fell 37 ringgit to 3,072 ringgit ($1,012.024) a tonne. Overall traded volume stood at 22,711 lots of 25 tonnes each, lower than the usual 25,000 lots.
Traders are turning their focus to the US Agriculture Department report due at 1230 GMT for further market cues. The report is expected to show tight supply due to bad weather and floods in key part of US grain and soybean planting regions, based on surveys of 88,000 growers. "There is some correction and profit-taking after the market went up for two straight days," said another trader with foreign brokerage in Kuala Lumpur.
He added: "The market trend depends on what the USDA report shows later in the day as it might have strong bearing on soy and soyoil futures, which will eventually give direction to the palm oil market." US soyoil for July delivery rose 0.3 percent on Thursday, and the most active January 2012 soyoil contract on China's Dalian Commodity Exchange climbed 0.7 percent during Asian trade hours.
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