(April 7): Malaysian palm oil futures fell in evening trade on Thursday, reversing earlier gains as weaker demand weighed on prices and traders took profits ahead of official data due next week.
Palm oil inventories in March are forecast to have dropped below 2 million tonnes, breaching that level for the first time in a year, with production coming in at its weakest for the month since 2007, a Thomson Reuters survey showed.
Malaysian inventories are likely to have fallen by 10.3% from a month earlier to 1.95 million tonnes at end-March, the survey of nine planters, traders and analysts
showed.
showed.
The Malaysian Palm Oil Board (MPOB) is scheduled to release March data on Monday.
The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed 0.4% down at 2,710 ringgit (US$693) a tonne. Traded volumes were 34,119 lots of 25 tonnes each, against a 2015 daily average of 44,600 lots.
"We see some profit-taking happening and demand is not as fantastic as people thought," a Kuala Lumpur-based trader said.
Traders expect crude palm oil demand to slow this month, as Malaysia raised its export duty for April to 5% from zero for the first time in nearly a year.
Technical analysis shows signals are neutral for palm oil, which has been stuck in a range of 2,716-2,776 ringgit a tonne, according to Wang Tao, Reuters market analyst for commodities and energy technicals.
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