The benchmark September contract on the Bursa Malaysia Derivatives exchange ended MYR6 lower at MYR2,384 a metric ton after moving in a MYR2,380-MYR2,389 range.
Traders and analysts said the seasonal rise in oil palm production from June-July onwards in Malaysia and Indonesia will boost stock levels, making prices vulnerable to further declines, but "the extent of the fall in prices will hinge on production growth," said a senior analyst from a Singapore-based brokerage.
Data for June 1-25 palm oil exports were up on month but were within or near market expectations, prompting investors to book profits as the market had priced in such data in recent trading sessions when prices rallied.
Cargo surveyor SGS (Malaysia) Bhd. estimated that exports during June 1-25 rose 6.1% to 1.11 million tons. Another surveyor, Intertek Agri Services, pegged exports at 1.12 million tons, up 8.9% on month.
A pullback in crude oil trade in Asia pulled CPO prices lower. August crude on the New York Mercantile Exchange fell to as low as $75.90 a barrel. The contract was trading 43 cents lower at $76.08/bbl at 1017 GMT.
Malaysia's June 1-25 palm oil exports will likely be up around 7%-12% from the first 25 days of May to around 1.12 million to 1.15 million tons, traders said.
"June exports could end a tad higher on month, as demand is seen rising gradually," a Malaysia-based exporter said.
Profit booking was also prompted by a lack of trades in the physical market.
"The cash market has been sluggish today as most buyers are on the sidelines, expecting a further fall in prices," said a Singapore-based trader.
Cash palm olein for August was traded at $782.50/ton and September at $772.50/ton free on board Malaysian ports.
CME Group Inc.'s dollar-based CPO futures contract for September was offered $3 lower at $736.50/ton as of 0931 GMT.
Rupiah-denominated September CPO futures on the Indonesia Commodity and Derivative Exchange ended 0.6% higher at IDR6,315 a kilogram, with 158 lots traded. One lot is equivalent to 10 tons. The October contract was trading 0.8% higher at IDR6,280/kg with 97 lots done.
Open interest on the BMD was 76,131 lots versus 75,560 lots Thursday. One lot is equivalent to 25 tons.
A total of 9,069 lots of CPO were traded versus 12,431 lots Thursday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Jul'10 2,451 2,457 Down 06 2,456 2,450 Aug'10 2,409 2,413 Down 04 2,414 2,407 Sep'10 2,384 2,390 Down 06 2,389 2,380 Oct'10 2,373 2,380 Down 07 2,377 2,370 -By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; email@example.com