Malaysian palm oil reversed earlier gains on Tuesday and snapped a four day rally, tracking a wider sell-off among many commodities as macro data stoked investor concerns about the health of the global economy. The benchmark October contract on the Bursa Malaysia Derivatives Exchange ended 1.1 percent lower at 3,002 Malaysian ringgit ($1,006) per tonne.
Earlier, prices touched 3,045 ringgit, to flirt with near-two week highs. Traded volumes for the contract were 13,200 lots of 25 tonnes each, compared to 9,786 lots on Monday. "It is outside markets - news came in regarding economic data out in Germany," said a Kuala Lumpur-based trader. "Everybody is still very jittery on the economic outlook."
"Equities in Europe opened down quite a lot and proceeded to be very erratic," he added. "Palm oil doesn't exist in a vacuum alone - so it is all inter-linked." Earlier on Tuesday, palm oil had traded steady, supported by data last week from the US Agriculture Department, which lowered its output estimate for soybeans.
Following on from that, on Monday exports of Malaysian palm oil products for August 1-15 rose 27 percent to 953,852 tonnes from 752,047 tonnes shipped during July 1-15, cargo surveyor Intertek Testing Services said. "At the end of September there should be some downside, on the back of peak harvesting season," said a Singapore-based analyst on the palm oil outlook.
"In August, production should come down because of the fasting season, so we could see inventories stable at current levels before September." In other vegetable oils, US soybeans for November delivery dipped, while the most active May 2012 soyoil on China's Dalian Commodity Exchange also fell. "Trade remains choppy as investors sell on worries that the demand of soybean could slow down at a time when China increased soybean imports and edible oil prices lately," said an oil analyst with local brokerage in Shanghai.
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