How to trade Crude Palm Oil Futures ( FCPO ) 11 Aug 2016

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Malaysian palm oil futures snapped a three-day rally on Thursday evening, falling from a near two-month high reached in the previous session and tracking weaker rival oils.

Benchmark palm oil futures for October on the Bursa Malaysia Derivatives Exchange fell 0.6% to 2,484 ringgit (US$621) per tonne at the end of the trading day, dropping from a previous session's top of 2,512 ringgit, the strongest levels since June 14.

Traded volumes stood at 64,719 lots of 25 tonnes each in the evening, higher than last year's average of 44,600.

"Overseas markets are softer today," said a trader from Kuala Lumpur, referring to competing vegetable oils such as soyoil.

"We are also undergoing a technical correction, as it is overdone on yesterday's sharp move up."

Palm oil rose for a third straight session on Wednesday afternoon, after official data from government body the Malaysian Palm Oil Board (MPOB) showed that stockpiles for end-July unexpectedly declined.

Inventories had fallen by 0.2% from June to reach 1.77 million tonnes, against a Reuters forecast of a 3.1% rise to 1.83 million tonnes.

MPOB data also showed that exports surged 21% lifted by better demand from China, the world's second largest importer of palm oil, while July production rose 3.5%
month-on-month to 1.59 million tonnes.

Weaker performing vegetable oils also weighed on palm. The Chicago Board of Trade soybean oil December contract was down 1%, while the January soybean oil contract on the Dalian Commodity Exchange fell 1.5%.   

Palm oil may fall to 2,432 ringgit per tonne, as it failed again to break resistance at 2,489 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.