Malaysian crude palm oil futures ended lower on Tuesday, pulled down by profit taking after gaining for four straight days. Dealers said the market still has potential to rise because of strong Chinese and European demand.
"The undertone is still upside," said one dealer. "Demand for forwards is very good, Chinese and Europeans are buying in a big way and soyaoil prices are firm."
The benchmark third-month September contract on the Bursar Malaysia Derivatives finished down 10 ringgit at 1,489 ringgit ($409) a tonne. Overall volume stood at 5,120 lots of 25 tonnes each, almost half of what was traded on Monday.
Other contracts were down between 6 and 11 ringgit. The Chicago Board of Trade soyabean market closed higher on Monday amid changing weather outlooks that sparked short covering before the US holiday, traders said.
July soyabeans closed 6-3/4 cents higher at $6.01-1/2 per bushel. The deferred months were 2 to 8 cents higher. CBOT agricultural markets will be closed on Tuesday for the Independence Day holiday and reopen with the night e-session.
In the physical palm oil market, sellers were offering crude palm oil for July shipment at 1,425 to 1,430 ringgits a tonne, but buyers were keen to seal deals at around 1,420 ringgit. Traders said deals were done at 1,420 ringgit.