Malaysian crude palm oil futures tumbled to a two-week low on Thursday as traders unwound positions on signs of slowing demand and expectations global stocks of vegetable oils would rise. The palm oil market has shifted its focus from a largely upbeat price outlook conference that ended the day before to a slew of vegetable oil and grains industry data in Malaysia and the United States.
"Malaysian exports data looks dismal for the first 10 days of March and production should be starting to rise again. The falls in Chicago soyoil are not helping," said a trader with a foreign commodities brokerage. "Bearish technicals are also weighing in." The benchmark May palm oil contract on the Bursa Malaysia Derivatives Exchange dropped as much as 4 percent to 3,441 ringgit ($1,134) per tonne, its lowest since February 25.
The contract settled at 3,459 ringgit, down 3.5 percent, on brisk volume of 24,861 lots of 25 tonnes each, with most market participants back from the three-day Bursa Malaysia palm oil conference. Exports of Malaysian palm oil products for March 1-10 fell 19 percent to 353,542 tonnes from the same period a month ago, Intertek Testing Services said, extending declines that started from December. Another cargo surveyor, Societe Generale de Surveillance, said exports in the same period fell 16.6 percent to 355,485 tonnes.
The weak exports come as Malaysia's February closing stocks rose to a two-month high, suggesting supplies will become ample. Other vegetable oil markets also fell. US soyoil for May delivery dropped 1.3 percent on expectations the USDA will also raise its forecast of ending stocks. China's most active soybean oil contract for September delivery followed suit, ending 1.7 percent lower.
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