Malaysian palm oil futures slipped to a near two-week low on Friday as a bout of technical selling pressured prices, but the market was range-bound ahead of a key industry report on production and stocks in the world's No 2 producer. A surge in the palm market last Friday prompted a round of profit-taking and a technical correction this week, stretching losses into a fourth straight day and dragged prices to post their biggest weekly loss since early March.
Market players are waiting for official data on Malaysian end-October palm oil stocks, exports and output that will be released on Monday by industry regulator, the Malaysian Palm Oil Board (MPOB). A Reuters survey on Thursday showed that Malaysian palm oil stocks probably inched up to 1.82 million tonnes in October, with the increase in inventories limited as the seasonally high-cycle began to wane and monsoon rains dented production.
"This is the fourth day the market is down. There is a correction in prices and some technical selling going on. The focus will be on Monday for the MPOB data," said a trader with a foreign commodities brokerage. By Friday's close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had fallen 1.5 percent to 2,506 ringgit ($788) per tonne. Prices traded in a range between 2,506-2,540 ringgit, and have shed 4.6 percent so far this week - the steepest weekly drop in about 8 months.
Total traded volume stood at 28,901 lots of 25 tonnes each, lower than the usual 35,000 lots as some investors stayed on the sidelines ahead of the official stocks report. Technicals showed that Malaysian palm oil is expected to fall further to 2,491 ringgit, as it has broken below support at 2,544 ringgit per tonne, said Reuters market analyst Wang Tao. In the vegetable oil markets, the US soyaoil contract for December fell 0.9 percent in late Asian trade. The most-active May soyabean oil contract on the Dalian Commodities Exchange fell 0.6 percent.
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