KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange slip Monday as market participants liquidated riskier positions following the release of data that showed factory output in China continued to contract in April.
The benchmark July contract on the Bursa Malaysia Derivatives exchange ended 0.7% lower at MYR3,475 a metric ton after moving in a range of MYR3,472-MYR3,522/ton.
Prices moved in a narrow range as market participants refrained from placing big bets ahead of April 1-25 export data due Wednesday and key central bank meetings later in the week.
May soyoil on the Chicago Board of Trade was 0.4% lower at 55.60 cents a pound as of the end of trade on the BMD.
"Palm oil eased sharply in the afternoon as planters in some palm oil growing states [in Malaysia] are seeing a recovery in CPO production in April" after a seasonal drop in yields during the October-March period, a trading executive in Kuala Lumpur said.
Some planters in peninsular Malaysia tip production to rise 2%-5% in April from 1.21 million tons in March.
The rise in production could help to ease tightness in global supplies of vegetable oils, and reverse a 8% rise in the palm oil market. Palm oil could fall further toward MYR3,400/ton in coming sessions due to increasing worries about demand from China, the world's top consumer of vegetable oils, an analyst in Jakarta said.
In the cash market, refined palm olein for May was offered at $1,160/ton while cash CPO for prompt shipment was offered at MYR3,500/ton.
Open interest on the BMD was 122,092 lots, versus 115,733 lots Friday. One lot is equivalent to 25 tons.
A total of 26,203 lots of CPO were traded versus 29,436 lots Friday.
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