Malaysian palm oil futures fell to a one-month low on Wednesday with traders expecting a slower than forecast decline in February output. The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.7 percent at 2,245 ringgit ($552.41) a tonne at the close of trade.
Earlier in the session, the contract fell to 2,238 ringgit, its lowest levels since Jan. 18. Trading volumes stood at 42,795 lots of 25 tonnes each at the end of the trading day. Production fell 3.9 percent from a month earlier to 1.74 million tonnes in January, data from the Malaysian Palm Oil Board showed.
Output of the edible oil typically falls during the first quarter of the year in line with seasonal trend. February data is due out on March 10 but some traders are expecting a small fall month-on-month following the January report. "Production for these two months, January and February, (is) higher year-on-year," said a Kuala Lumpur based trader.
"Exports also didn't go up as much as people thought." Malaysia's palm oil exports from Feb. 1-20 slightly rose 0.03-0.8 percent from a month earlier, AmSpec Agri Malaysia and Intertek Testing Services reported on Wednesday. Another cargo surveyor, Societe Generale de Surveillance, however reported that exports fell 4.6 percent in the same time period.
In other related oils, the Chicago March soyabean oil contract was up 0.2 percent, while the May soyaoil contract on the Dalian Commodity Exchange fell 0.8 percent. Meanwhile, the Dalian May palm oil contract declined 1.7 percent. Palm oil prices are affected by movements in soyaoil, as they compete for a share in the global vegetable oil market.
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