Malaysia palm oil futures fell on Tuesday as the stronger ringgit and reports of higher production last month weighed on sentiment. The benchmark June crude palm oil contract on the Bursa Malaysia Derivatives Exchange ended down 0.4 percent at 2,520 ringgit ($780.2) after dropping to as low as 2,498 ringgit - a level unseen since February 5.
Traded volume surged to 18,000 lots of 25 tonnes each from the usual 10,000 lots. The ringgit rose 0.6 percent to 3.210 per dollar, eating into refiner margins as crude palm oil feedstock for refined products is priced in the Malaysian currency.
Another trader said a report by a palm oil industry group in the key producing state of Johor showed regional output rose 18 percent in March as oil palms recovered from yield stress and drier weather gave way to rains. Southern Johor state accounts for a fifth of Malaysia's total production.
Vegetable oil markets are watching a brewing trade dispute between China and Argentina. Argentina's government urged China on Monday to suspend a measure affecting imports of Argentine soybean oil in a trade spat that threatens a key hard currency earner for the South American nation.
Crude oil pulled back from an 18-month high hit in the earlier sessions, weighing on US soyoil for May delivery. Futures on China's Dalian Commodities Exchange, which opened on Tuesday after a holiday, were up. Palm, soy and crude oil prices at 1006 GMT Contract.
INDONESIA PALM TRADES In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, sold 10,500 tonnes of crude palm oil in an auction at a top price of 7,303 rupiah ($0.807) per kg on Tuesday.
The firm did not sell all 11,000 tonnes of crude palm oil offered in the auction on Monday due to low bids. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, sold crude palm oil at 7,245 rupiah per kg to 7,325 rupiah per kg. Producers there did not hold any palm oil tenders on Monday.