Malaysian crude palm oil slipped on Thursday after rallying the previous day as traders booked profits ahead of the release of two key reports, while uncertainty over the euro zone debt crisis also dampened investors' risk appetite. The market is keeping a close watch on the February crop production as well as the supply and demand reports set to be issued by the US Department of Agriculture on Thursday.
Traders are also eyeing the Malaysia's January palm oil data, which will be released by the Malaysia Palm Oil Board (MPOB) on Friday. "Since last Thursday, prices have soared about 123 ringgit and open interest surged almost 6,553 lots. However futures rallied ahead of cash and refiners were buying at a steep discount to futures," said a trader with a local commodities brokerage in Kuala Lumpur.
Benchmark April palm oil futures on the Bursa Malaysia Derivatives Exchange lost 0.2 percent to close at 3,148 ringgit ($1,047) per tonne, adding to the 0.9 percent loss that the futures market has suffered this year. Traded volumes were thin at 22,666 lots of 25 tonnes each, compared to the usual 25,000 lots as most market players were waiting for further cues.
Reuters market analyst Wang Tao said palm oil futures will retrace to 3,115 ringgit as it faces a strong resistance at 3,165 ringgit. Ahead of the MPOB report on Friday, a Reuters survey of six plantation houses showed Malaysia's palm oil stocks in January probably fell to a five-month low to nearly 2 million tonnes as a drop in exports outran a fall in production.
The survey also pointed to a steeper 15.1 percent decline in Malaysian palm oil exports for January, compared to the 11.9 and 13 percent according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance. The cargo surveyors will issue export data for the first 10 days of February on Friday, which will indicate how much the world's No 2 edible oil buyer, China, is restocking after the Lunar New Year festival in January.