Palm oil fell to the lowest level in more than two weeks on speculation that the 13 percent rally since the end of January will deter importers and on expectations that production may gain this month in Malaysia.
The July-delivery contract declined 0.7 percent to close at 3,479 ringgit ($1,136) a metric ton on the Malaysia Derivatives Exchange, the lowest for the most-active contract since March 30. Futures lost 2.6 percent last week.
Exports from Malaysia, the second-largest producer after Indonesia, fell 15 percent to 594,798 tons in the first 15 days of April from a month earlier, according to surveyor Intertek. Shipments declined 13.5 percent to 606,804 tons, Societe Generale de Surveillance said yesterday.
“Demand is quite bad,” Chandran Sinnasamy, trading head at Kuala-Lumpur based LT International Futures (M) Sdn., said by phone. “Edible-oil prices are in a correction phase.”
Although exports looked weak, demand may pick up in the coming weeks as price declines could attract more buying, Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said in a report yesterday.
“Resistance will now be seen at 3,500 ringgit to 3,520 ringgit a ton levels,” he said. “It is a much needed correction for the uptrend to sustain.”
While production in April may be 3 percent to 5 percent higher than last month, there was also speculation that it may be unchanged, said LT International’s Chandran. Output gained 2.1 percent to 1.21 million tons in March from 1.19 million tons in February, the Malaysian Palm Oil Board said April 10.
Soybeans for July delivery retreated 0.6 percent to $14.2325 a bushel on the Chicago Board of Trade. Soybean oil for the same month lost 0.3 percent to 55.97 cents per pound.
Palm oil for September closed little changed at 8,854 yuan ($1,405) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month ended little changed at 9,880 yuan.