Malaysian palm oil futures reversed earlier gains to fall in evening trade on Tuesday as the market took profits in anticipation of higher than expected end-stocks. Official palm oil data for March from the Malaysian Palm Oil Board (MPOB) will be announced next Monday. A Reuters poll has forecast stockpiles fell by 10.3 percent to 1.95 million tonnes.
The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange lost 0.5 percent to settle at 2,756 ringgit ($703) per tonne at the end of the trading day. Traded volumes were 40,606 lots of 25 tonnes each, compared with a 2015 daily average of 44,600 lots. "There's some profit taking and technical selling pressure. Also the Reuters poll is not encouraging as some thought stocks would be lower than 1.95 million tonnes," a trader from Kuala Lumpur said.
The poll also forecasts Malaysian output at 1.13 million tonnes, 8 percent higher from February but its lowest levels for the month since 2007, as the crop-damaging El Nino weather pattern affects fruit yields and lowers production. There is normally a seasonal pickup in March palm output, with production rising 34 percent month-on-month in 2015 and 17 percent in 2014.
In competing vegetable oil markets, the May Chicago Board of Trade soyoil contract fell 0.6 percent, while the September soybean oil contract on the Dalian Commodity Exchange rose 1 percent. The offer price for crude palm kernel oil fell to 5357.21 ringgit per tonne on Tuesday evening due to slowing sales, according to price assessments by Thomson Reuters. Palm kernel oil offer prices climbed to a near five-year high last week on supply concerns before coming down slightly as the market was overdone, traders said.
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