Palm oil lower

Malaysian palm oil futures ended lower on Thursday to snap a three-day winning streak as crude oil prices began to ease, although losses were capped by an uptick in exports and anticipation that hot weather would trim palm output. The benchmark September contract on the Bursa Malaysia Derivatives Exchange had edged down 0.5 percent to 2,471 ringgit ($768) per tonne by the day's close, reversing gains in the morning session.
Total traded volume stood at 43,886 lots of 25 tonnes, much higher than the average 35,000 lots. "You can see that there's some fall in energy prices, especially on the WTI side this afternoon," said a trader with a foreign commodities brokerage in Kuala Lumpur. Technicals showed palm oil faces a resistance at 2,513-2,554 ringgit, while its support level is at 2,472-2,422 ringgit, according to Reuters market analyst Wang Tao.
But hot and dry weather in Malaysia this month could be an early sign of the drought-inducing El Nino weather pattern, market participants said, keeping palm prices propped up. "A lot of people see June production going up, but because of the weather, it is not," another Kuala Lumpur-based trader said. Traders said the Malaysian Palm Oil Association, a group of growers, estimates palm output in the first twenty days of the month to be relatively unchanged from May.
Short spells of dry weather would hinder growth and quality of yields, while a prolonged drought could disrupt fruit formation, affecting output six to seven months later. Cargo surveyors on Wednesday reported that exports of Malaysian palm oil products rose 0.4-3.0 percent during June 1-25 compared to the same period a month ago, the first sign of improvement after recording weaker shipment volumes throughout the month.
India's edible oil imports, including palm oil, may rise 5.4 percent to 11.7 million tonnes in 2014/15 as a weak monsoon hurts domestic oilseeds production, Govindbhai Patel, a trade expert from India's western city of Rajkot, said at a regional palm oil conference in Mumbai on Thursday. In competing vegetable oil markets, the US soyoil contract rose 0.1 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange was nearly flat.