SINGAPORE: Malaysian palm oil futures slumped over 1% from recent highs on Thursday, following the Lunar New Year break, but selling pressure was limited due to Indonesia's new mandate for 20% of domestic output to be sold at home.
The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange dipped 1.10% to 5,528 ringgit ($1,315.87) per tonne in early trade.
The contract hit a record high of 5,700 ringgit a tonne at the end of January, and prices are expected to remain well supported while market participants assess how Indonesia's new domestic sales mandate impacts crude palm oil flows from the world's largest palm oil producer and exporter.
Indonesia’s palm oil export curbs upend global edible oil markets
Strong global soybean prices amid crop health worries in South America are also expected to lend support to edible oil prices.
Fundamentals
US soybean futures maintained their recent upward momentum in early trade, building on Wednesday's advance to eight-month highs on the back of expectations that lower South American supplies will lift demand for US soybeans.
Crude oil prices eased in early trade, following OPEC's decision to stick with planned moderate output increases.
Palm oil FCPOc3 may test a resistance at 5,676 ringgit per tonne, a break above which could lead to a gain into the 5,749-5,794 ringgit range, Reuters technical analyst Wang Tao said.
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