KUALA LUMPUR: Malaysian palm oil futures eased on Thursday, dipping after two sessions of gains on year-end profit-taking and in line with declines in rival soyoil.
The tropical oil had risen to its highest in a week-and-a-half on Wednesday, supported by a rebound in exports and tight market supplies.
Benchmark palm oil futures for March delivery on the Bursa Malaysia Derivatives Exchange were down 0.7 percent at 3,106 ringgit ($693) a tonne at the end of the trading day.
Traded volumes stood at 43,089 lots of 25 tonnes each in a day.
"Towards the year-end there is some profit-taking after book closures. Furthermore soy oil is also not supportive," said a futures trader in Kuala Lumpur.
"However, the tightness is still there, production is down, so the market is still on the upside moving forward."
Output in Malaysia, the world's second-largest producer, declines seasonally in the last quarter of the year. It also
drops at the year-end when the monsoon season arrives, as the fruit-harvesting process is disrupted by rainfall which contributes to tight supplies.
Output in November fell 6.1 percent to 1.57 million tonnes, according to government data. Traders and analysts said it could remain weak in December.
Palm oil may retest resistance at 3,163 ringgit per tonne, with a good chance of breaking above this level and rising more towards the next resistance at 3,415 ringgit over the next three months, according to Reuters market analyst for commodities and energy technicals Wang Tao.
Palm prices are also impacted by the performance of rival edible oils, as they compete for a share in the global vegetable oils market.
The March soybean oil contract on the CBOT was up 0.1 percent, while the May soybean oil contract on the Dalian Commodity Exchange fell 0.2 percent.
The May contract for Dalian palm olein dropped 0.5 percent.
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