KUALA LUMPUR (Reuters) - Malaysian palm oil futures fell to their lowest in three days on Monday tracking weaker related edible oils, and were on track for a second day of drop after five sessions of gains.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 1.5 percent to 2,134 ringgit ($524.58) a tonne at the midday break, its sharpest decline since March 4. It earlier fell to a three-day low of 2,133 ringgit.
“Weak external markets weighed on palm. The market was also earlier overbought, so now it is seeing a pullback,” said a Kuala Lumpur-based trader.
“While exports should be steady, overall production for March should be up slightly.”
Gains in production would add to current stockpiles, which unexpectedly rose 1.3 percent to 3.05 million tonnes in February, according to industry regulator the Malaysian Palm Oil Board earlier this month.
Palm oil may test a support at 2,142 ringgit per tonne, a break below which could cause a loss to the next support at 2,094 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related oils, the Chicago May soybean oil contract eased 0.2 percent, after 1.5 percent drop on on Friday.
Soybean had fallen on worries over demand for ample U.S. supplies as Brazilian farmers are harvesting a bumper crop.
Meanwhile, the May soyoil contract on the Dalian Commodity Exchange declined 1 percent and the Dalian May palm oil contract fell 0.9 percent.
Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.
($1 = 4.0680 ringgit)
($1 = 6.7130 Chinese yuan)
($1 = 69.1100 Indian rupees)
Reporting by Emily Chow, Editing by