Malaysian crude palm oil futures edged lower on Wednesday, off a five-week high, as traders booked profits from a weather-fuelled rally that had boosted prices by more than 3 percent this week. Traders took cues from the US Department of Agriculture (USDA) which on Monday slashed its condition rating for soybean crops to 45 percent good-to-excellent, from 53 percent a week ago, due to extreme hot and dry weather.
"At the moment fundamentals are supporting bullishness, but it looks like after going up so much for the past few days the market could slow down and retrace back for a while," said a trader based in Singapore with a foreign commodities house. Benchmark September palm oil futures on the Bursa Malaysia Derivatives Exchange fell 0.1 percent to close at 3,122 ringgit ($990) per tonne. Prices earlier rose as high as 3,147 ringgit, a level not seen since May 30.
Traded volumes stood at 26,553 lots of 25 tonnes each, slightly higher than the usual 25,000 lots. On the technicals front, palm oil will end its rebound at or below a resistance at 3,155 ringgit per tonne, said Reuters market analyst Wang Tao. Malaysia's palm oil demand climbed in June from a month earlier, according to cargo surveyor data, boosted by higher exports to India and Pakistan. In other vegetable oils markets, the most active January 2013 soyoil contract on the Dalian commodity exchange edged up 0.5 percent on US weather concerns. The US market is closed for the Independence Day holiday.