Palm oil snaps rally for first fall in six days on weak export data

Malaysian palm oil futures fell one percent on Friday evening, snapping six straight sessions of gains on cargo surveyor data that showed weak exports and as investors booked profits. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 1 percent at 2,750 ringgit ($643.80) at the end of the trading day, its sharpest intraday drop since August 15.
Palm had gained 5.3 percent in the previous six sessions, hitting a five-month high on Thursday, on expectations that production growth will be slower than earlier forecasts. Traded volumes stood at 51,050 lots of 25 tonnes each on Friday evening.
"The market is seeing profit-taking for the weekend on the back of weak exports," said a futures trader from Kuala Lumpur, referring to data from cargo surveyor Intertek Testing Services (ITS). Palm oil shipments from Malaysia, the world's second largest producer after Indonesia, fell 8.1 percent on month during August 1-25.
Cargo surveyor Societe Generale de Surveillance showed a similar decline in export data, with a 8.4 percent drop in the same time period. Another trader said he expects August exports to fall from the previous month, but production to remain flat. Palm oil production in July rose 20.7 percent from a month earlier to 1.83 million tonnes, exceeding industry expectations, according to industry regulator data.
Exports, in comparison, gained 1.3 percent to 1.40 million tonnes in July. In related vegetable oils, the October soybean oil contract on the Chicago Board of Trade was down 0.7 percent, while January soybean oil on the Dalian Commodity Exchange fell 0.5 percent. The January palm olein contract on Dalian fell 0.2 percent. Palm oil prices are impacted by the movements in related edible oils, as they compete for a share in the global vegetable oils market.