KUALA LUMPUR, March 12: Malaysian crude palm oil futures eased on Monday, as weak Chinese exports and a slightly bearish US soybean report offset the bullish sentiment that had propelled prices to 9-month highs last week.

China posted its largest trade deficit in at least a decade, fanning concerns that slowing exports from the world’s second largest economy will hurt global growth, as well as demand for palm oil.

The US Department of Agriculture report on Friday was also slightly bearish on soybean oil prices, showing the fall in total consumption outpaced the decline in production.

“Overall, the news is slightly negative for CPO prices as it tracks soybean oil prices closely. However, the low production season in the first quarter, and improving demand from China and India, should support CPO prices in the near term,” said Alan Lim, research analyst with Kenanga Investment Bank in Malaysia.

Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange lost 1 per cent to close at 3,317 ringgit ($1,097) per ton. Prices hit a 9-month high of 3,368 ringgit on Friday.

Traded volumes stood at 27,074 lots of 25 tons each, slightly higher than the usual 25,000 lots.

Bullish price outlooks from top analysts at a key palm oil conference sent prices to new highs last week, setting the stage for a price correction, said some traders.

“The market is technically overbought. The palm oil conference contributed to this, but the surging price is a double-edged sword.

At some point it can cause demand destruction,” said a Malaysia-based trader.

Malaysian palm oil exports for the first 10 days of March surged close to 30 percent to 444,259 tons, cargo surveyor Intertek Testing Services said on Saturday.

Another cargo surveyor Societe Generale de Surveillance reported a slightly higher 32 per cent increase in exports to 448,615 tons.

But the increase in exports is unlikely to have much of an impact on prices, as it was also matched by a rise in stocks.

Malaysia’s February palm oil stocks were higher than expected and stayed above the psychologically key level of 2 million tons. The stock level rose 2 per cent to 2.06 million tons from a revised 2.02 million in January, industry regulator the Malaysian Palm Oil Board said.—Reuters