Malaysian crude palm oil futures ended sharply lower on Wednesday as profit-taking dragged down the market after two days of strong gains, traders said. The benchmark third-month October contract on the Bursa Malaysia Derivatives ended 15 ringgit down at 1,540 ringgit ($417) a tonne.
Overall volume stood at 12,887 lots of 25 tonnes each. "The market was heavily bought, it is time for a correction," one dealer said. "Crude oil has fallen and soyoil is also down." Dealers said the market awaited export data from July 1 to 20 period due to be released by cargo surveyors on Thursday.
Exports of Malaysian oil palm products for July 1-15 stood at 520,036 tonnes, up 6.9 percent from 486,593 tonnes shipped between June 1 and 15, cargo surveyor SGS said at the weekend.
Another cargo surveyor, Intertek Testing Services, also said exports of Malaysia's palm products rose 4.6 percent during the first half of the month, up from 525,184 tonnes shipped from June 1 to 15. The palm oil market sometimes tracks energy prices as Malaysia moves closer to an October target to launch palm-based biodiesel at domestic pumps.
Oil prices sank on Tuesday in tandem with gold, silver and copper as fears over the risk of expanding Middle East violence eased, after Secretary of State Condoleezza Rice said the United States believed there should be a cease-fire between Israel and Hizbollah as soon as possible, "when conditions are conducive". US light sweet crude for August delivery fell 54 cents to $73.00 a barrel by 1035 GMT, paring a loss of $1.76 a day ago but well below the record of $78.40 last Friday.
August soybeans on the Chicago Board of Trade closed down 1 cent at $5.89 per bushel on Tuesday but off their low of $5.86. New-crop November was off 1/4 at $6.11.
In the physical palm oil market, buyers were quoting 1,465 ringgit a tonne for July shipments and sellers were at 1,470 ringgit. Dealers said some trading took place around 1,465 ringgit a tonne.