JAKARTA: Malaysian palm oil futures slid on Monday after three straight sessions of gains due to weakness in rival oils in Dalian Commodity Exchange and a quieter market.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.39% at 3,545 ringgit ($799.32) a tonne on the closing price.
The contract rose 2.24% last week as the El Nino weather phenomenon raised output concerns.
“The Bursa Malaysia Derivatives opened a gap lower mirroring weakness in rival oilseeds. The market was quiet with low trading volume as the US was closed for Memorial Day holiday,” a Kuala Lumpur-based trader told Reuters, adding that some technical buying emerged at late hour but failed to sustain.
Crude palm oil production in Malaysia, the world’s second-largest producer, could drop between 1 and 3 million tonnes next year due to the El Nino weather pattern, the Malaysian Palm Oil Board said on Friday.
Malaysia’s exports during May 1-25 fell 0.7% from the same period in April, cargo surveyor Intertek Testing Services said on Friday. Another cargo surveyor, AmSpec Agri Malaysia, said exports rose 0.7%.
Dalian’s most-active soy oil contract slipped 0.64%, while its palm oil contract fell 1.33%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may retrace to 3,498 ringgit per tonne, as it failed to break resistance at 3,563 ringgit.
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