Malaysian palm futures fell on Thursday as traders booked profits on expectations of higher stocks in the months to come and sharp declines in agriculture commodities. The tropical oil has lost 15 percent so far this year and could extend the losses as the market expects Malaysian palm oil stocks to have hit a six-month high in April with production outstripping a modest growth in exports.
"The market took a turn for the worse. We expect more losses in the coming days and this will hopefully attract some buying interest from the big consumers," said a trader with a foreign commodities brokerage in the Malaysian capital. The benchmark July contract on the Bursa Malaysia Derivatives Exchange ended 1.1 percent lower to 3,229 ringgit ($1,085) per tonne - nearing a two-week low of 3,228 ringgit hit the day before.
Overall traded volume stood at 28,605 lots of 25 tonnes each, higher than the 25,500 lots usually traded. Reuters technical analysis showed palm oil is expected to end the current consolidation soon and develop a directional move thereafter. US crude oil futures fell $3 to $106.24 a barrel on Thursday as fund managers and traders dumped commodities fearing that demand destruction was setting in.
Losses in crude dragged on other vegetable oil markets. Chicago soyoil for May delivery fell 0.7 percent due to pressure from large South American harvests and slowing demand from China. China's most-active January 2012 Dalian soyoil contract inched lower.
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