Malaysian palm oil futures gave up early gains to close slightly lower on Wednesday, tracking weakness in related edible oils in Chicago and on China's Dalian Commodity Exchange. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed down 0.1 percent at 2,581 ringgit ($601.35) a tonne. It hit a seven-week peak of 2,614 ringgit a tonne on Tuesday, its highest since May 23, but reversed gains later in the day.
Traded volumes totalled 39,020 lots of 25 tonnes each on Wednesday. "Palm fell in the later half of trade on weaker bean oil," said a futures trader in Kuala Lumpur, referring to soyaoil on the CBOT. "The market, however, still saw some support as Dalian did not fall that much." Palm oil prices are affected by the performance of related edible oils including soyaoil, as they compete for a share in the global vegetable oils market.
Soyabean oil on the Chicago Board of Trade dropped 0.7 percent on Wednesday, while the September soyabean oil on the Dalian Commodity Exchange was down 0.03 percent. In related edible oils, the September palm olein contract fell 0.5 percent. Palm prices could be supported by stronger export data from cargo surveyors for the first half of July, which is scheduled for release on Saturday.
Intertek Testing Services reported a 1.9 percent drop between July 1-10, while Societe Generale de Surveillance showed a 3.8 percent gain versus the corresponding period last month. Palm oil may slide a bit more into the range of 2,560-2,569 ringgit per tonne, said Reuters market analyst for commodities and energy technicals Wang Tao.
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