Palm oil price declines as traders take profit

Malaysian palm oil futures ended higher on Wednesday, tracking buoyant soy oil and crude oil prices, and prompting short covering among traders.

KUALA LUMPUR: Malaysian palm oil futures fell almost 1 percent on Monday evening on profit-taking after recording their biggest daily gain in around five months in the previous trading session.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,528 ringgit ($619.61) at the end of the trading day.

Palm had seen a downward trend in recent weeks, sliding on bearish sentiment over weak demand and high stockpiles, before jumping almost 3 percent to reach its highest level in a week in the previous session.

Trading volumes stood at 34,122 lots of 25 tonnes each on Monday evening.

A trader said the market fell on profit-taking, as it "lacks catalysts to drive short-term gains." However, further declines look unlikely, he added.

"Production may decline for another month," he said, referring to the full-month output for December. 

Palm oil output sees a seasonal decline at the end of the year before rising in roughly the second quarter.

Output in November was last down 3.3 percent on the month at 1.94 million tonnes, according to the most recent official data from industry regulator the Malaysian Palm Oil Board.

In other related oils, the January soybean oil contract on the Chicago Board of Trade rose 0.4 percent, while the January soybean oil contract on the Dalian Commodity Exchange also rose 0.4 percent.

The Dalian January palm olein contract gained 0.9 percent.

Palm oil prices are affected by other edible oils as they compete for a share in the global vegetable oils market. - Reuters