* Prices track weaker U.S., Dalian soybean oil
* Palm oil to slide further to 2,365 ringgit -technicals
(Updates prices)
By Chew Yee Kiat
SINGAPORE, June 4 (Reuters) - Malaysian palm oil futures
fell on Tuesday, tracking weaker soybean oil markets, although
losses were contained by expectations that inventories would
drop further in the world's second largest palm producer.
Soybeans fell for the first time in three sessions as
traders banked profits, pulling down prices for both soybean oil
and competing palm oil.
Stagnant production growth and demand recovery hopes that
have rallied the palm oil market since early May could still
provide support, although analysts were cautious against being
too bullish on near-term prices.
"We remain cautiously bearish on crude palm oil," said
Singapore-based Phillip Futures in a note to clients.
"Unless the 2,500 ringgit level is broken on the upside, we
believed that this current rally is a relief rally and crude
palm oil prices will fall back towards 2,200 in time to come."
At market close, the benchmark August contract on
the Bursa Malaysia Derivatives Exchange was down 0.9 percent at
2,375 ($768) ringgit per tonne, after trading between 2,370
ringgit and 2,388 ringgit.
Total traded volumes stood at 28,120 lots of 25 tonnes each,
lower than the average 35,000 lots.
Technicals showed palm oil may slide further to 2,365
ringgit per tonne, as a correction from the May 29 high of 2,420
ringgit has expanded, said Reuters market analyst Wang Tao.
Traders are pinning hopes on a demand recovery and weak
production to ease Malaysian palm oil stocks in May. The stocks
fell to a 10-month low of 1.93 million tonnes in April.
Exports fell over 3 percent in May compared to a month ago,
as shipments to Europe and China slowed and offset stronger
demand from India and Pakistan ahead of the Muslim festival of
Ramadan.
The holy month, which starts in July this year, typically
sees higher edible oil consumption as Muslims gather for
communal meals to break fast together.
In vegetable oil markets, U.S. soyoil for July fell
0.6 percent in late Asian trade, while the most-active September
soybean oil contract on the Dalian Commodities Exchange
lost 1.5 percent.
In other markets, Brent crude futures slipped below $102 a
barrel on Tuesday as weak U.S. manufacturing data from the day
before stoked worries about demand growth in the world's biggest
oil consumer.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN3 2345 -15.00 2334 2345 24
MY PALM OIL JUL3 2367 -23.00 2361 2381 5005
MY PALM OIL AUG3 2375 -21.00 2370 2388 14056
CHINA PALM OLEIN SEP3 6102 -84.00 6090 6202 420472
CHINA SOYOIL SEP3 7414 -116.00 7380 7540 1004222
CBOT SOY OIL JUL3 48.39 -0.27 48.29 48.61 4792
NYMEX CRUDE JUL3 92.99 -0.46 92.81 93.39 15702
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
Crude in U.S. dollars per barrel
($1=3.093 ringgit)
