KUALA LUMPUR: Malaysian palm oil futures retreated from a six-week top on Monday, poised to snap five sessions of gains, tracking weaker soybean oil prices on the US Chicago Board of Trade and on a technical correction.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.3 percent at 2,217 ringgit ($540.73) a tonne at the midday break. In the previous session, palm climbed to 2,235 ringgit, its highest since Feb. 25.
"The market is lower on a technical correction as it was earlier overbought, but a weak ringgit capped losses," said a Kuala Lumpur-based futures trader.
The market is, however, bullish in the medium-term ahead of official data release from the Malaysian Palm Oil Board, which is forecast to show a decline in March-end stocks, the trader added.
Malaysia's palm oil stockpiles in March are likely to have dropped by 6.4 percent from February to 2.85 million tonnes, its lowest in five months, according to a Reuters survey, as a hefty jump in exports outpaced production gains.
The Malaysian Palm Oil Board is scheduled to release March data on Wednesday.
A weaker ringgit, palm's traded currency, usually supports the edible oil by making it cheaper for foreign buyers. The ringgit weakened 0.2 percent against the dollar at 4.0955 around noon on Monday.
In other related oils, Chicago May soybean oil contract was down 0.2 percent, and the May soyoil contract on the Dalian Commodity Exchange slightly rose 0.1 percent. Meanwhile, the Dalian May palm oil contract gained 0.8 percent.
Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.
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