Malaysia palm oil futures ended Thursday's trade lower, shedding more than 1 percent as sentiment tracked the softer performance of rival oils in Dalian and on the Chicago Board of Trade. Benchmark palm oil futures for March delivery on the Bursa Malaysia Derivatives Exchange fell 1.22 percent to end the session at 3,076 ringgit ($687.22) per tonne.
Traded volumes remained thin, with 30,826 lots of 25 tonnes each done. "Overseas markets are weak today, especially Dalian. CBOT is down due to ample supplies," a trader based in Kuala Lumpur said. "The fall in Dalian soya and palm olein futures could be due to the slump in the iron ore market," the trader added. Dalian iron ore futures slid more than 4 percent to a one-month low on Thursday as air pollution disrupted trading in China.
The January soyabean oil contract on the CBOT dropped 1.33 percent. The May contract for Dalian soyabean oil and the palm olein contract on Dalian fell 1.55 and 1.34 percent, respectively. Trading on the palm market was also subdued as the holiday season approaches.
"There is a lack of participation ahead of the long weekend," a Kuala Lumpur-based trader said earlier. Bursa Malaysia is closed next Monday for Christmas. Palm oil targets 3,045 ringgit per tonne, as suggested by a Fibonacci retracement analysis, Reuters technical analyst Wang Tao said. Palm prices have shown a roller-coaster performance since the beginning of December.
The contract logged a three-day rally last week, hitting a 4-1/2-year high on the weaker ringgit before diving for three straight sessions earlier this week on poor export data from Malaysia. A weaker ringgit makes palm oil cheaper for holders of other currencies. On Wednesday, the tropical oil rebounded as traders covered positions in anticipation of the long weekend.