Malaysian palm oil extends losses

Malaysian palm oil futures fell for a third straight session on Thursday, hitting their lowest in a week as traders took a cautious stance over mounting China-US trade war friction and on a lack of bullish news. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 0.6 percent at 2,284 ringgit ($565.21) a tonne at the end of the trading day, after earlier falling to a one-week low of 2,278 ringgit.
Trading volumes stood at 43,391 lots of 25 tonnes each on Thursday evening. The Trump administration's decision to impose tariffs on $34 billion in Chinese exports to the United States is due to go into effect on Friday. China said its tariffs on US goods will take effect immediately after Washington's tariffs on Chinese goods kick in.
"The market is cautious as anxiety over the US-China trade war loomed in," said a Kuala Lumpur-based trader. Another trader said a lack of market-supportive news had pulled down palm prices. Palm oil prices fell 4 percent last month, hitting a two-year low on the back of lean demand. They have declined 1.8 percent so far this week.
According to a Reuters poll, Malaysian inventories for June are seen edging down to a nine-month low of 2.15 million tonnes, while production is expected to fall 11.1 percent to 1.36 million tonnes, its lowest since February. The poll also forecast that exports would fall 7.8 percent to a three-month low of 1.19 million tonnes in June.
In other related oils, September soyabean oil on China's Dalian Commodity Exchange was trading flat around 1040 GMT, while the Dalian September palm oil contract fell 0.3 percent. The Chicago December soyabean oil contract was closed for a public holiday on Wednesday.
Palm oil prices track the performance of other edible oils as they compete for a share of the global vegetable oils market. Palm oil is biased to break support at 2,290 ringgit per tonne and fall to the next support at 2,270 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.