KUALA LUMPUR, March 28: Malaysian crude palm oil futures fell as much as 3.7 per cent on Friday as traders took profits across vegetable oil markets.
Volumes were thin ahead of a report on prospective soy and corn plantings in the United States.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange dropped 133 ringgit at 3,507 ringgit ($1,098) per ton before settling down 90 ringgit at 3,550 ringgit.
“The vegetable oil markets were rising very steeply earlier in the week and financial players are just taking some profits to take a little steam off,” said a trader with a local brokerage.
Fears of tight edible oil supplies have supported palm oil prices, with soy-producing Argentina and palm oil-exporting Indonesia hiking sales levies amid booming demand from China and India.
“If the U.S. report does not indicate a strong increase in soy plantings as the market expects, we could be in for stronger global vegetable oil prices,” said Sarina Lesmani, an Indonesia-based analyst with Macquarie Research.
“The increases in export taxes in Argentina and Indonesia show that global edible oil stocks are low and countries are trying to keep as much as they can to stem price increases.” Other traded months fell between 34 and 105 ringgit. Overall volume dropped to just 5,219 lots of 25 tons each, compared with a more normal 10,000 lots.
On Monday, the U.S. Department of Agriculture will issue a report laying out its latest estimates for this year’s seeding of corn, soybean and wheat crops.
Soybean plantings are estimated by analysts on average at 71.721 million acres, up from 63.6 million last year.Dalian soyoil futures most traded September contract dropped 1.5pc and Chicago Board of Trade soyoil for May delivery was down 1.5pc in trading during Asian hours.
Palm oil had staged a solid comeback earlier this week but remains 21pc off historic highs of 4,486 ringgit in early March.
Argentine President Cristina Fernandez urged farmers on Thursday to call off a strike and start talks to end two weeks of protests that have paralysed exports and left meat counters bare.
In Malaysia’s physical market, crude palm oil for March shipment in the southern region was quoted at 3,560/3,600 ringgit a ton. Trades were done between 3,570 and 3,580 ringgit.
—Reuters