Malaysian palm oil futures edged down after hitting a one week-high in early trade on Thursday, undergoing a technical correction after strong gains in the previous session and on sluggish demand. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange rose to its highest in a week at 2,220 ringgit ($547.20) a tonne in the morning before falling 0.8 percent to 2,193 ringgit at the end of the trading day.
Trading volume stood at 47,045 lots of 25 tonnes each at the close of trade. "The market is coming back to its senses after yesterday's jump. Exports are also expected to be unchanged for the first 20 days," said a Kuala Lumpur-based futures trader, referring to shipment data for the July 1-20 period, scheduled for release on Friday.
Malaysian palm oil production is expected to rise in July and throughout the third quarter of the year in line with the seasonal trend. Gains are also forecast to jump from a low base in June, which saw output decline 12.6 percent month-on-month to 1.33 million tonnes.
In other related oils, the Chicago December soyabean oil contract was down 0.6 percent. Palm oil prices are usually impacted by the performance of other edible oils as they compete for a share in the global vegetable oils market. Palm oil faces a resistance at 2,218 ringgit per tonne, a break above which could lead to a gain to the next resistance at 2,249 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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