Malaysian palm oil futures fell over 1 percent on Friday, recording a fifth session of declines in six, tracking weakness in soyaoil on the US Chicago Board of Trade (CBOT). The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down 1.1 percent at 2,253 ringgit ($551.80) a tonne at the close of trade, its sharpest daily decline in a week.
The contract also lost 1.6 percent this week in its second straight weekly decline. Trading volumes stood at 32,706 lots of 25 tonnes each on Friday evening. "Palm oil fell tracking CBOT soyaoil, which slumped overnight," said a Kuala Lumpur-based futures trader. Palm oil prices are affected by movements in soyaoil rates, as they compete for a share in the global vegetable oil market.
Exports in the first half of February likely rose from a month earlier, but the demand may not be sustained throughout the month, the trader said. "Seasonally, exports in February should be lower... but we could also see some (demand) spillover from January." Malaysian palm oil exports during Feb. 1-15 rose 11.6-12.9 percent from a month ago, according to data released by Intertek Testing Services and AmSpec Agri Malaysia during the midday break on Friday.
Another cargo surveyor, Societe Generale de Surveillance, reported a 4.2 percent gain for the same period on Friday evening. In other related oils, the Chicago March soyabean oil contract was down 0.2 percent after shedding 0.3 percent in the previous session.
CBOT grains and soyabean futures tumbled on Thursday on news that China and other buyers had cancelled a flurry of US soyabean orders in early January and Argentina's soya crop could be larger than previously expected, traders said. Meanwhile, the May soyaoil contract on the Dalian Commodity Exchange fell 0.2 percent, while the Dalian May palm oil contract was down 0.1 percent.
Palm oil may retest support at 2,249 ringgit per tonne, as it has completed a bounce triggered by this level, said Wang Tao, a Reuters market analyst for commodities and energy technicals.