* Fresh rains reduce concern over slowing output
* Market heavily overbought -trader
* Palm oil expected to fall to 2,645 rgt -technicals
(Updates prices)
By Emily Chow
KUALA LUMPUR, March 24 (Reuters) – Malaysian palm oil
futures dropped on Thursday for a second consecutive session,
tracking falls in competing overseas oils and as fresh rains
reduced concerns over slowing output.
The palm oil contract for June delivery on the
Bursa Malaysia Derivatives Exchange closed nearly 1 percent down
at 2,674 ringgit ($ 664) a tonne. Traded volumes were 46,085 lots
of 25 tonnes each in the evening, versus a 2015 daily average of
44,600 lots.
“The market was heavily overbought, so there should be
corrections around the 2,600-2,700 ringgit level. We also saw
recent rains in Kuala Lumpur and other places,” a Kuala
Lumpur-based trader said.
Palm oil rose in the four sessions through Tuesday to a
two-year high on fears that an El Nino weather pattern would
damage fresh fruit yields and lower production.
Rains across Malaysia, the world’s second-largest palm
producer, could lessen the impact of El Nino, a dry weather
phenomenon that brings scorching heat across Southeast Asia.
However, official data on February crude palm oil output in
Indonesia, the world’s top palm producer, is expected to show
further declines from January because of droughts and forest
fires, a Reuters survey showed.
Crude palm oil production could have droppped to 2.30
million tonnes in February, according to the median estimate in
a survey of two industry associations and one of the country’s
largest planters. That is down from 2.44 million tonnes in
January and the lowest since February 2015.
Palm oil is expected to fall to a support at 2,645 ringgit a
tonne, as suggested by a Fibonacci projection analysis, said
Wang Tao, Reuters market analyst for commodities and energy
technicals.
In competing vegetable oil markets, the September soybean
oil contract on the Dalian Commodity Exchange fell 2
percent and the May Chicago Board of Trade soyoil contract
lost 0.6 percent.
Crude palm kernel oil’s offer price stood at 5142.26 ringgit
a tonne (PKO-MYSTH-M1) at the midday break, falling for a second
day after touching a four-year high on Tuesday, according to
price assessments by Thomson Reuters.
“I don’t think such high levels can be sustained. Prices
should correct themselves in a month’s time,” one trader said.
Palm, soy and crude oil prices at 1052 GMT:
Contract Month Last Change Low High Volume
MY PALM OIL APR6 2625 -23.00 2600 2639 580
MY PALM OIL MAY6 2651 -28.00 2634 2661 3148
MY PALM OIL JUN6 2674 -26.00 2656 2689 22162
CHINA PALM OLEIN SEP6 5354 -112.00 5328 5416 1142368
CHINA SOYOIL SEP6 5930 -124.00 5924 6010 675006
CBOT SOY OIL MAY6 33.14 +0.00 33.11 33.44 8304
INDIA PALM OIL MAR6 0.00 +0.00 0.00 0 0
INDIA SOYOIL APR6 0 +0.00 0 0 0
NYMEX CRUDE MAY6 38.94 -0.85 38.92 39.77 62783
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($ 1 = 4.0270 ringgit)
($ 1 = 66.8650 Indian rupees)
($ 1 = 6.5128 Chinese yuan)
(Reporting by Emily Chow; Editing by Subhranshu Sahu and David
Goodman)