Malaysian crude palm oil futures edged off a one-month high on Thursday, as traders turned cautious over demand prospects, with the worst drought in the US Midwest in 56 years pushing oilseed prices higher. "The market looks a little toppish. The current high prices will certainly hurt demand," said a trader with a domestic commodities brokerage in Malaysia.
"We are also entering the peak palm oil production months of September and October, which could cap any major rallies." The benchmark November 2012 contract on the Bursa Malaysia Derivatives Exchange lost 0.6 percent to close at 3,061 ringgit ($990) per tonne. Prices had earlier hit a high of 3,100 ringgit, a level last seen on July 17. Total traded volumes soared to 43,207 lots of 25 tonnes each after the midday break, compared to the usual 25,000 lots.
Technicals appear to be supportive. Palm oil will rise to 3,183 ringgit per tonne as it has broken above a resistance at 3,044 ringgit, said Reuters market analyst Wang Tao. Demand for the edible oil has been resilient, with Malaysia's palm oil exports rising 6 percent for the August 1-20 period from a month ago on higher shipments to China and India, cargo surveyor Intertek Testing Services said on Wednesday.
Another cargo surveyor, Societe Generale de Surveillance will release August 1-20 data, together with August 1-25 data, on Monday. In other vegetable oil markets, the most active US soyoil contract for December delivery lost 0.3 percent by 1002 GMT. The most active January 2013 soyoil contract on the Dalian Commodity Exchange ended up 0.2 percent.