Malaysian crude palm oil futures slipped 1.4 percent on Wednesday as prices of rival soybean oil declined and traders booked profits a day after the market surged on hopes of strong overseas buying. The benchmark September contract on the Bursa Malaysia Derivatives Exchange finished down 36 ringgit, or 1.4 percent at 2,479 ringgit ($720) a tonne.
"Losses in soybean oil overnight have translated to losses in the palm oil market and players are also taking profits on yesterday's gains." Other traded months fell between 9 and 43 ringgit in overall trade of 8,874 lots of 25 tonnes each. Industry officials say palm oil demand is expected to pick up from July as nations from South Asia to the Middle East lock in supplies for the Muslim holy month of Ramazan, which is due in September.
The product is more than 10 percent off a historic high of 2,764 ringgit reached in June on robust demand from India and China and dwindling reserves at home. Soybean futures at the Chicago Board of Trade closed lower Tuesday on a profit-taking setback after the rally that began Friday in response to USDA's bullish acreage figure, traders said. Soyoil settled 0.34 to 0.47 cent per lb weaker, with July down 0.37 cent at 36.36 cents.
The July contract deepened losses by more than 1 percent at 36.36 cents per lb in electronic trading during Asian hours on Wednesday, 1024 GMT. Soyoil usually lends support to the palm oil market due to common use in products ranging from lipstick to confectioneries and biofuels.
September palm oil on Singapore's Joint Asian Derivatives Exchange fell 1.5 percent to $719.25 by 1026 GMT. In Malaysia's physical market, crude palm oil for July shipment in the southern region was quoted at 2,615/2,625 ringgit a tonne. Trades were done between 2,610 and 2,620 ringgit.
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