Malaysian palm oil futures ended off a 2-year low on Thursday, as investors remained cautious over high stocks and the eurozone debt crisis. Traders said palm oil inventory in No 2 producer Malaysia could climb higher in September after reaching a 10-month high in August, as exports did not rise enough to offset high production. Prices fell to 2,569 ringgit per tonne - a fresh low since September 2010 - before the midday break although prices recovered slightly on bargain hunting.
"The market is hitting new low on continuation of technical selling. Fundamentals are still bearish," said a trader with a foreign commodities brokerage in Malaysia. "And you also have uncertainty about Europe on top of all these pressure. Immediate support is at 2,500 ringgit for today and tomorrow."
At the close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange lost 0.3 percent to 2,607 ringgit ($848) per tonne. Total traded volumes stood at 36,301 lots of 25 tonnes each, slightly lower than the usual 25,000 lots. Futures have lost almost 18 percent so far this year, on track for their worst performance since 2008.
Market traders were cautious ahead of a US Department of Agriculture report on Friday on season-end stocks of soybeans, which are expected to be at an 8-year low according to a Reuters poll. In other vegetable oil markets, US soyaoil for December delivery edged up 0.5 percent in late Asian trade. The most active January 2013 soyaoil contract on the Dalian Commodity Exchange lost 1.8 percent after touching its lowest level since June.
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