Malaysian palm oil futures were lower in late trade on Wednesday, recording a third straight day of losses on the back of weaker related edible oils on the US Chicago Board of Trade and China's Dalian Commodity Exchange. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 0.1 percent to 2,431 ringgit ($627.68) a tonne at the end of the trading day.
Trading volumes stood at 36,862 lots of 25 tonnes each at the close of trade. "The market is still under correction and following weaker related oils," said a Kuala Lumpur-based futures trader. Another trader said the market is taking a break from recent movements and would trade in the 2,400-2,450 ringgit range.
Palm oil rose to a five-week high last week after Malaysia said it would extend tax exemptions on crude palm oil (CPO) exports to a fourth straight month in April, a move aimed at cutting inventories and propping up prices. It fell over 1 percent in the previous session on bearish data from industry regulator, the Malaysian Palm Oil Board.
Palm oil production rose 17.2 percent to 1.57 million tonnes in March from the previous month, while exports climbed 19.2 percent to 1.57 million tonnes, the data showed. While stockpiles fell 6.2 percent to 2.32 million tonnes, the decline was smaller than market expectations. A Reuters poll had forecast March end-stocks in Malaysia to decline 8.6 percent from February to 2.27 million tonnes.
In related oils, the Chicago Board of Trade's May soyabean oil contract dropped 0.4 percent. Meanwhile, May soyabean oil on China's Dalian Commodity Exchange fell 1 percent, while the Dalian May palm oil contract was down 0.6 percent. Palm oil prices are impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Palm oil may break support at 2,419 ringgit per tonne and fall more towards the next support at 2,392 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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