The benchmark August contract on the Bursa Malaysia Derivatives exchange ended MYR1 lower at MYR2,490 a metric ton after moving in a MYR2,481-MYR2,498 range.
Higher crude oil and soyoil prices boosted prices in early trade, but speculation that palm oil output has risen in May prevented palm futures from climbing above MYR2,500/ton, trade participants said.
"The market has been directionless today and most traders have opted to liquidate their positions until there's a clearer direction in the market," said an executive at Kuala Lumpur-based commodities brokerage.
Some trade participants said CPO output in May has risen around 5%-6% so far this month, damping market sentiment with expectations that end-month palm oil inventory levels could also rise.
Investors ignored talk that palm oil exports were also likely to rise in the May 1-25 period, focusing instead on palm oil's supply fundamentals.
"Palm oil exports may have risen to around 1.03 million tons (for the May 1-25 period)," said a senior trading executive at Malaysia-based plantation company.
The loading of the vessels seems to have been fairly active in some ports in east Malaysia, a Malaysia-based shipping executive said.
Exports totaled 947,304 tons for the first 25 days in April, according to data from cargo surveyor Intertek Agri Services. Another independent surveyor SGS (Malaysia) Bhd. put exports in the period at 1.01 million tons.
Both surveyors are likely to issue estimates of exports for the corresponding period of May on Tuesday.
Prices may rise above MYR2,500/ton on Tuesday if exports meet market expectations, a Singapore-based analyst said.
Sluggish demand in the physical market also limited any rise in prices today, a Singapore-based cash market broker said.
Palm olein for October/November/December was traded at $780/ton free on board from Malaysian ports, a Singapore-based trader said.
Cash CPO for prompt shipment was offered MYR10 higher at MYR2,570/ton. Open interest on the BMD was 69,048 lots, versus 68,244 lots Friday. One lot is equivalent to 25 tons.
A total of 6,019 lots of CPO were traded versus 12,806 lots Friday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Jun'10 2,530 2,531 Down 01 2,545 2,530 Jul'10 2,508 2,511 Down 03 2,520 2,501 Aug'10 2,490 2,491 Down 01 2,498 2,481 Sep'10 2,472 2,480 Down 08 2,480 2,467 -By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; firstname.lastname@example.org