Malaysian palm oil futures fell on Thursday in tandem with other vegetable oil markets as investors booked some profits although the tropical oil's deepening discount to competing soyoil limited losses. Vegetable oil markets are likely to make little headway ahead of the US Department of Agriculture's supply-demand report on Monday, which will update the agency's crop forecasts.
Hot and dry weather has hurt US soybean yields, making crude palm oil at least $220 cheaper than soyoil that could shift demand to the tropical oil. This could lift the market that has fallen almost a fifth on concerns the eurozone debt could stall global economic growth.
Prices also drew support from market views that Malaysian palm oil stocks in August likely fell for a second-straight month as exports and local demand outstrip sluggish production during a key Muslim festival. "Palm oil markets fell in line with other markets as profit-taking took hold but there will be some support as demand will shift to palm oil from soyoil," said a trader with a foreign commodities brokerage in Malaysia. The benchmark November palm oil on the Bursa Malaysia Derivatives Exchange settled down 0.6 percent to 3,023 ringgit ($1,013.41) per tonne in choppy trade.
Exchange volumes stood at 24,744 lots at 25 tonnes each versus the usual 25,000 lots. Reuters technical analyst Wang Tao said Malaysian palm oil will rebound to the 3,119 ring per tonne level as a "morning star" formed on the daily candlesticks chart. Other vegetable oil markets were muted as well. US soyoil for October delivery fell 0.6 percent in Asian trade. The most active May 2012 soy oil on China's Dalian Commodity Exchange gained 0.4 percent.