21/03/2012 (Economic Times) - Malaysian palm oil futures extended losses on Tuesday as some traders took profits on concerns that the market was overbought, although losses were limited by still-robust demand, indicated by export trends.

Palm oil rallied to a 9-month high of 3,418 ringgit last Friday on an upbeat price outlook, and traders said the market was poised for a correction.

"Prices ended lower in unison with CBOT and technical-based selling. It looks like the much anticipated correction is taking place currently and once that is completed, prices will resume their uptrend," said a trader with a local brokerage in Malaysia.

By the midday break, benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange lost 0.2 percent at 3,366 ringgit ($1,099) per tonne, paring gains this year to 6 percent from a year-high 7.2 percent.

Traded volumes on Tuesday stood at 13,680 lots of 25 tonnes each, slightly more than the usual 12,500 lots.

Palm oil faces a support at 3,343 ringgit per tonne and will rise to test resistance at 3,398 ringgit, said Reuters market analyst Wang Tao.

Cargo surveyor Intertek Testing Services reported a 14 percent increase in Malaysian exports for the first 20 days of March, indicating that demand is still strong despite a slowdown compared to the first 15 days.

Another cargo surveyor, Societe Generale de Surveillance, will release export data later in the day.

Market players are also paying close attention to a strike by Argentina's truckers to demand higher pay rates just as exporters were counting on them to haul freshly harvested soybeans to port.

Traders are looking out for planting forecasts from the U.S. Department of Agriculture due at the end of the month to help gauge soybean output for the year.

Lower soybean output means less for crushing into soyoil, allowing the competing palm oil to meet the shortfall.

Brent crude fell towards $125 a barrel, as global supply concerns eased and a hike in Chinese fuel prices sparked fears of lower energy demand in the world's second-largest oil consumer.

In other vegetable oil markets, the most active U.S. soyoil contract for May delivery lost 0.8 percent in Asian trade while the most active September 2012 soyoil contract on China's Dalian Commodity exchange edged down 1 percent.

Palm, soy and crude oil prices at 0523 GMT.