KUALA LUMPUR: Malaysian palm oil futures reversed gains on Tuesday evening after hitting a one-month top, declining by nearly 1 percent in a technical correction to two straight sessions of strong rises.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,436 ringgit ($630.43) a tonne at the close of trade. Earlier it rose to the one-month top of 2,465 ringgit hit on Monday.
Trading volumes stood at 39,563 lots of 25 tonnes each at Tuesday's close of trade.
"Palm prices are taking a breather following yesterday's surge," said a futures trader from Kuala Lumpur.
The market could trade in a range as traders are expecting both good exports and output in March, said another trader. "Palm should trade along 2,400 ringgit-2,500 ringgit until new leads emerge," he added.
Malaysian palm oil exports in March rose 19 percent-21 percent on a monthly basis, according to data from inspection company AmSpec Agri Malaysia and cargo surveyor Societe Generale de Surveillance.
Demand in early April is also forecast to be strong due to Ramadan, the Muslim holy month during which day long fasts are broken with communal feasting, increasing the usage of palm oil for cooking purposes.
Output in March is expected to rise due to the higher number of working days and in line with seasonal trend. The Malaysia Palm Oil Board is set to release March data on April 10.
In related oils, the Chicago Board of Trade's May soybean oil contract fell 0.25 percent and the May soybean oil on China's Dalian Commodity Exchange was up 0.3 percent.
The Dalian May palm oil contract rose 0.1 percent.
Palm oil prices are impacted by movements in rival edible oils as they compete in the global vegetable oils market.
Palm oil may test a support at 2,440 ringgit per tonne, a break below which could cause a further loss to the next support at 2,424 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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