Malaysian palm oil futures fell on Thursday from 6-1/2 month highs, snapping three sessions of gains due to bearish price forecasts from a key industry analyst. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 0.2 percent at 2,867 ringgit ($681.97). Earlier in the session, it hit 2,896 ringgit, its highest since March 6.
Trading volumes stood at 59,275 lots of 25 tonnes each. A Kuala Lumpur-based futures trader pointed to leading industry analyst James Fry's bearish comments about palm prices at the Globoil India conference on Thursday. "Market is also hearing that other industry analysts are also not so bullish about palm's price outlook in the near term. There is no catalyst for palm to rise towards the 3,000 ringgit mark as fundamentals are quite weak," the trader said.
He added that palm's rise had also led to some profit taking. Fry told the conference that palm prices were likely to fall nearly 17 percent from current levels, to below 2,400 ringgit per tonne, by November or December as overseas appetite for the commodity falters over the winter. Places such as China and Europe normally reduce their intake of palm oil in winter months as the tropical product solidifies in cold temperatures.
Fry said the recent rally in palm futures following reports of a drop in crude palm oil output in Malaysia was "irrational" as a reduction in production due to national holidays would be made up later. Earlier in the session, the futures contract tracked a rally in Dalian Commodity Exchange's January palm olein which climbed as much as 1.6 percent. In other related oils, the Chicago Board of Trade (CBOT) soyabean oil contract rose as much as 0.1 percent. The January soyabean oil contract on the Dalian Commodity Exchange climbed 0.5 percent.
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