Palm slips on weaker China Dalian oils, profit-taking

KUALA LUMPUR: Malaysian palm oil futures fell on Tuesday from a two-week high hit in the previous session, on profit-taking and as the market tracked a weaker performance in related oils on China's Dalian Commodity Exchange.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 0.8 percent at 2,482 ringgit ($577.68) a tonne, at the midday break. 

Traded volumes stood at 15,297 lots of 25 tonnes each. 

"The Dalian market is down today, coupled with the US market close," said a futures trader in Kuala Lumpur. The soyoil market on the Chicago Board of Trade is closed for the US Independence Day holiday. 

Another Kuala Lumpur-based trader said profit-taking added to palm's declines early in the day. 

Palm oil prices are impacted by movements in related edible oils, as they compete for a share in the global edible oils market. 

The September soybean oil on the Dalian Commodity Exchange slipped as much as 1.5 percent, while the September palm olein contract declined up to 1.4 percent. 

Palm prices, which already dived 7.1 percent on-quarter in the April-June period, are expected to decline further in the third quarter of this year as production might rise in line with seasonal trend. 

Demand is seen to remain weak until the next major festive occasion of Diwali in October. 

There is generally an increase in the sale of palm oil a month ahead of the Hindu religious event, as buyers stock up ahead of festivities for cooking purposes. 

Palm oil faces a resistance at 2,503 ringgit per tonne, according to Reuters market analyst for commodities and energy technicals Wang Tao.