SINGAPORE: Malaysian palm oil futures inched down on Monday as a drop in export numbers for the first half of the month saw some traders booking profits, although losses were curbed by tightening edible oil supply.
Palm oil hit a 13-month high at 3,628 ringgit per tonne last week on the back of Malaysian stocks falling below the 2-million-tonne mark for the first time year, fanning ears of tighter global supplies give the drought curbing soy crop in South America.
But the futures market ended that week with a 2.6 percent loss, as some traders said the market was overbought.
Malaysian palm oil exports fell by a steep 14.8 percent for the first half of April compared to a month ago, said cargo surveyor Intertek Testing Services, although analysts said that may not necessarily be a sign of weaker demand.
"You can't just look at what happen in 15 days and say that demand is weak. There may be other reasons such as timing in shipping. We need to get the overall (export data) for the month (to gauge demand)," said James Ratnam, an analyst at TA Securities in Malaysia.
"It seems more like technical selling. Exports for the first 15 days down 15 percent, it could be a good excuse to sell. It doesn't really translate into weak demand. Demand might not be as strong as last month but 15 percent is a bit too steep."
By the midday break, benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange edged down 0.5 percent at 3,478 ringgit ($1,133) per tonne.
Traded volumes stood at 13,460 lots of 25 tonnes each, higher than the usual 12,500 lots.
On the technicals front, Reuters market analyst Wang Tao maintained a bearish view, saying palm oil would slide further to 3,401 ringgit per tonne.
Malaysia's palm oil stocks for March fell to a seven-month low at 1.96 million tonnes, beating market esstimates and prompting some traders to lock in more crude palm oil purchases.
Market players will also be watching export data by another cargo surveyor Societe Generale de Surveillance, which is expected to echo earlier data issued by ITS.
Brent crude futures slipped towards $120 on Monday after weak growth numbers from China, the world's No. 2 oil consumer, and a surge in Spanish borrowing costs triggered worries about global economic growth and demand.
In other vegetable oil markets, the most active US soyoil contract for May lost 0.7 percent while the most active Dalian soyoil September contract lost 1.5 percent.
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