Malaysian palm oil futures slumped more than 5% on Monday, snapping a four-session rally as traders booked profits and prices tracked losses in crude oil and Chicago soyoil.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange slid 217 ringgit, or 5.06%, to 4,072 ringgit ($915.36) a tonne by the midday break.
The contract surged 8.4% last week to a more than three- week high.
Palm oil is also weighed down by rumours that top produer Indonesia will lower palm oil reference price for August, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Exports of Malaysian palm oil products for July rose between 0.8% and 4% from the same week June, according to cargo surveyor data.
Dalian’s most-active soyoil contract DBYcv1 fell 0.2%, while its palm oil contract DCPcv1 eased 0.5%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 2.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices dropped as weak manufacturing data from China and Japan for July weighed on the outlook for demand, making palm a less attractive option for biodiesel feedstock.
Palm oil may test a resistance of 4,452 ringgit per tonne, a break above which could lead to a gain to 4,680 ringgit, Reuters technical analyst Wang Tao said.
