Palm oil lower

Malaysian palm oil futures closed slightly lower on Thursday, recouping most of their losses after Spain sold as many bonds as it wanted, which helped calm fears about the euro zone economy but concerns about slowing demand kept prices lower. Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange lost 0.1 percent to close at 3,477 ringgit ($1,136) per tonne after falling during the session to 3,439 ringgit, its lowest level since March 30.
Traded volumes stood at 34,170 lots of 25 tonnes each, higher than the usual 25,000 lots. Malaysian palm oil exports fell by almost 15 percent for the first half of the month, stoking investor concerns that exports were slowing as orders shifted to top producer Indonesia, which enjoyed a favourable tax structure for refined products. Market players are now keeping a close watch on export data for April 1-20 due to be released on Friday for more signs about the demand trend.
Palm oil touched a 13-month high at 3,628 ringgit last week, and traders said it was now going through a price correction as most of the bullish factors, including 7-month low palm oil stocks, have been priced in. "I think the sentiment now has changed a bit. When the market hit above 3,600 ringgit, everybody was asking for a healthy correction. So now the immediate target is at about 3,400 ringgit," said a trader with a foreign commodities brokerage in Malaysia.
Tight soybean supply in drought-hit South America remained a bullish factor for palm oil and traders said that any signs that the supply situation is worsening could be supportive for palm oil futures. A bearish target of 3,402 ringgit per tonne remains unchanged for palm oil, however, provided it does not suddenly jump to 3,520 ringgit, said Reuters market analyst Wang Tao.
In related news, a Malaysian farmers' investment co-operative voted in favour of a controversial $2 billion listing of a state-linked palm oil firm, a government minister said on Thursday. In other vegetable oil markets, the most active US soyoil contract for May jumped 1.1 percent while the most active Dalian soyoil September contract ended trading 0.1 percent higher.