15/03/2010 (Bloomberg) - Palm oil fell a third day, tracking crude oil, and on concerns over higher soybean supplies from the South American harvest, reducing the need for substitutes.

May-delivery palm oil futures dropped as much as 1.2 percent to 2,618 ringgit ($790) a metric ton on the Malaysia Derivatives Exchange and traded at 2,621 ringgit at 12:06 p.m. Crude for April delivery in New York declined as much as 0.6 percent to $80.75 a barrel in Asian trading, and last traded at $80.81 a barrel. Palm oil, used as an alternative fuel additive, lost 0.8 percent last week as crude oil dropped 0.3 percent.

“A slight pullback could be underway this week” for crude oil, a technical report by RHB Research Institute Sdn. said today. And with palm oil failing to rise higher than 2,726 ringgit last week, “follow-through selling can be expected this week,” it added.

Soybeans traded in Chicago for May delivery dropped as much as 0.4 percent to $9.2175 a bushel, after losing 1.8 percent last week. They traded at $9.2425 at 12:05 p.m. Singapore time. Prices may drop below $9 a bushel as China, the world’s biggest importer, may switch more cargoes from the U.S. to South America, according to a Bloomberg survey on March 12.

Brazil’s soybean processors raised their crop forecast for the current marketing year to 67.6 million metric tons. The outlook for soybean output in the year that started Feb. 1 was raised from 65.2 million tons estimated on Jan. 26, Abiove, as the association is known, said March 12.

Malaysian Exports
Exports from Malaysia, the world’s second-largest producer, rose 18 percent in the first 15 days of March to 669,227 tons, independent market surveyor Intertek said today. Exports to China surged 29 percent to 191,059 tons, and India and the subcontinent, by 25 percent to 165,456 tons, Intertek said.

India’s imports of vegetable oils may reach a record 9.1 million tons in the year ending Oct. 31, from 8.66 million tons a year ago, a processor’s group said on March 12.

The purchases will include 7 million tons of palm oil- products, said BV Mehta, co-chairman of the crop committee of the Central Organization for Oil Industry & Trade.

In China, the largest edible oils user, September-delivery palm oil dropped 1.1 percent to 6,826 yuan ($1,000) a ton on the Dalian Commodity Exchange while soybeans lost 0.5 percent to 3,793 yuan at the 11:30 a.m. trading break.