A stronger local currency subdued sentiment, while palm olein's slight price premium over soyoil indicates it won't benefit from China's shift in exchange-rate policy as importers will prefer the cheaper rival.
Although China's announcement that it will allow a more flexible yuan is expected to raise purchasing power and boost commodity imports, trade participants said CPO has limited room to gain as there's lingering concern over vegetable oil stock levels of around 700,000 metric tons at Chinese ports.
The benchmark September contract on the Bursa Malaysia Derivatives ended MYR5 higher at MYR2,405 a metric ton. The ringgit rose to a five-week high of MYR3.1850 versus Friday's MYR3.2450.
Traders expect a likely appreciation of the yuan to boost China's edible-oil imports, but they weren't upbeat that CPO would benefit due to palm olein's premium over soyoil.
"We'll only have a better idea on China's palm imports after stocks are cleared to gauge the country's demand," said a senior trading executive at a Malaysia-based palm refining company.
"With palm olein now offered with a $20/ton premium to Argentinian soyoil, Chinese buyers are more likely to increase soyoil purchases," a Singapore-based trading executive said.
CPO and palm products traditionally trade at a wide discount of more than $100/ton to soyoil, but forecasts for a muted rise in CPO production in Malaysia and Indonesia have spurred a rally in palm oil in recent months, narrowing the gap to the point where palm olein now trades in a range $20 above and below soyoil.
Despite CPO's tepid reaction to the yuan news in morning trade, prices rose 0.9% to an intraday high of MYR2,421/ton in the afternoon, buoyed by the encouraging export data and crude oil's rise in Asian trade.
Cargo surveyor Intertek Agri Services put exports in the June 1-20 period up 17% from a month earlier at 906,321 tons, while another surveyor, SGS (Malaysia) Bhd., pegged the figure at 914,849 tons, up 16%.
Intertek estimated May 1-20 palm oil exports at 775,995 tons while SGS put the figure at 791,971 tons.
Light, sweet crude oil for July delivery on the New York Mercantile Exchange rose as much as 2.2% to $78.87 a barrel in Asia. July crude was trading $1.34 higher at $78.52/bbl at 1014 GMT.
In the cash market, palm olein for August delivery was traded at $790/ton, and October/November/December olein at $770/ton, free on board Malaysian ports, cash market trading executives in Singapore said.
Cash CPO was offered unchanged at MYR2,510/ton.
CME Group Inc.'s dollar-based CPO futures contract for September was $17.25 higher at $754.50/ton around 0947 GMT, with three lots traded. One lot is equivalent to 25 tons.
Rupiah-denominated August CPO futures on the Indonesia Commodity and Derivative Exchange ended 0.8% lower at IDR6,530 a kilogram, with one lot traded. One lot is equivalent to 10 tons.
The September contract was trading 0.8% higher at IDR6,285/kg, with 275 lots done.
Open interest on the BMD was 77,443 lots, compared with 78,027 lots Friday. One lot is equivalent to 25 tons.
A total of 12,738 lots of CPO were traded versus 11,864 lots Friday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Jul'10 2,476 2,470 Up 06 2,487 2,466 Aug'10 2,430 2,430 Unchanged 2,447 2,426 Sep'10 2,405 2,400 Up 05 2,421 2,399 Oct'10 2,393 2,386 Up 07 2,409 2,390 By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; firstname.lastname@example.org