Weak buying interest in the cash market due to a public holiday in China, a major buyer of palm oil, and expectations of a continued increase in CPO output in April damped market sentiment.
The benchmark June contract on the Bursa Malaysia Derivatives ended down MYR29, or 1.1%, at an intraday low of MYR2,530/ton.
"When prices couldn't breach resistance at MYR2,590/ton, some investors liquidated their positions," a Malaysia-based trading executive said.
Supply-demand fundamentals are also a tad bearish, as CPO output may rise further in April, a senior executive from a Kuala Lumpur-based brokerage said.
The Malaysian Palm Oil Board is expected to issue data on exports, production and end-month stocks for March next Monday.
March end-month inventories are expected to rise due to increases in both local output and imports from Indonesia, after falling 10.9% in February to 1.79 million tons. March CPO production rose between 7% and 15% from the previous month, trade participants and planters said.
The ringgit has also risen to its highest level against the dollar since July 2008. The currency's strength weighs on futures because it makes CPO more expensive for refiners and narrows their profit margins.
In the cash market, palm olein for May/June shipment was offered $2.50 higher at $815.0/ton.
Cash CPO for prompt delivery was offered MYR20 lower at MYR2,580/ton.
Open interest on the BMD was at 78,028 lots, down from 83,116 lots Friday. One lot is equivalent to 25 tons.
Some 17,008 lots were traded versus 7,175 lots traded Friday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low Apr 2010 2,579 2,605 Down 26 2,624 2,579 May 2010 2,541 2,571 Down 30 2,595 2,541 Jun 2010 2,530 2,559 Down 29 2,588 2,530 Jul 2010 2,522 2,546 Down 24 2,578 2,522
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;