KUALA LUMPUR: Malaysian palm oil futures fell nearly 2% on Thursday to end a five-session rally on expectations of higher stockpiles in August, ahead of the release of supply and demand data.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 87 ringgit, or 1.94%, at 4,391 ringgit ($1,059.09) a tonne.
It had earlier fallen as much as 2.5%.
Speculative selling took over after the US Department of Agriculture released its monthly US crop acreage data two days earlier than scheduled, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“The selling in futures provided an excellent opportunity for buyers to cover their exposure,” Paramalingam said, adding that prices were expected to recover quickly.
The market is now awaiting Malaysian Palm Oil Board data and cargo surveyors’ data for Sept. 1-10 exports, both due on Friday.
Traders are anticipating a double-digit rise in August supply, in line with industry surveys.
A Reuters poll last week pegged inventories at the end of August to expand to their highest in over a year as production rebounded amid a steep fall in exports.
Indonesia palm oil exports in January-July jumped 3% compared to the same time last year, official data from the trade ministry.
Dalian’s most-active soyoil contract was unchanged, while its palm oil contract gained 1.2%. Soyoil prices on the Chicago Board of Trade were down 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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