Palm oil lower

Palm oil futures slipped on Friday as the European Union summit failed to build on moves for fiscal union to salvage the euro, potentially putting the brakes on global economic growth and commodity demand. A deepening split in the bloc emerged on Friday with majority of EU leaders agreeing to enforce stricter budget rules for the single currency region while Britain rejected the proposed amendments after failing to secure its concessions.
Palm oil futures still notched its first weekly gain in three weeks over concerns of heavy rains curbing output and eating into stocks. "Sentiment has been taken over by the eurozone gloom," said a dealer with a foreign commodities brokerage in Kuala Lumpur. Benchmark February palm oil futures on the Bursa Malaysia Derivatives Exchange settled down 0.2 percent to 3,084 ringgit ($980) per tonne.
Overall traded volumes stood at 14,037 lots of 25 tonnes each, much lower than the usual 25,000 lots as investors were unwilling to commit funds or take positions for now. The Malaysian weather office stuck to its earlier warning that a two-day moderately heavy rain spell starting from Monday in the key oil palm growing states of Johor and Pahang could cause floods in low-lying areas.
Both states account for 30-40 percent of national output. Excessive rains, however, can affect oil yield quality and force palm oil firms to sell the edible oil at a discount. So far, however, planters have not reported major logistical disruptions. "I think the markets have priced in lower production for now," said another trader in Kuala Lumpur. Cargo surveyor Intertek Testing Services will issue December 1-10 Malaysian palm oil exports on Saturday. The market is expecting exports to fall 5.5 percent to around 442,000 tonnes from November 1-10. China's most active May 2012 soybean oil contract edged up 0.1 percent.