Malaysian palm oil futures fell on Friday, a fourth market session of falls this week, weighed down by declining rival oils and expectations of higher output in April. They have fallen 0.9 percent so far this week, on track for a second consecutive weekly decline. The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 0.5 percent to 2,644 ringgit ($678) per tonne at the close of trade.
Traded volumes were 69,304 lots of 25 tonnes each, higher than a 2015 daily average of 44,600. A Kuala Lumpur-based trader said the fall was likely to be due to overnight losses in external markets, while higher production is also expected for April.
Although analysts expect the El Nino weather phenomenon to reduce global production of palm oil this year by 700,000 tonnes due to crop damage, April output typically rises in line with seasonal trend. A bullish target at 2,716 ringgit per tonne has been temporarily aborted for palm oil, as it failed to go above the April 13 high of 2,684 ringgit, according to Wang Tao, Reuters market analyst for commodities and energy technicals. The September soybean oil contract on the Dalian Commodity Exchange fell 0.6 percent while the May Chicago Board of Trade soyoil contract declined 0.7 percent. The offer price for crude palm kernel oil slipped to 4877.71 ringgit per tonne in the evening, according to price assessments by Thomson Reuters.