Malaysian palm oil futures hit over two-week lows on Friday, tracking a weaker overseas soy complex and crude oil amid grim global economic news as traders awaited a key speech by Federal Reserve Chairman Ben Bernanke. Palm oil has lost more than 21 percent so far this year due to high stocks and volatile financial markets.
"Investors tend to be cautious ahead of Ben Bernanke's speech, but the debt crisis in the US will not end overnight," said a trader in Kuala Lumpur. "Unless there are strong fundamentals to support the palm oil market, nothing will change for now as investors are liquidating positions ahead of the long holiday."
The benchmark November crude palm oil contract fell 0.8 percent to 2,975 ringgit ($995.483) a tonne after going as low as 2,953 ringgit - a level unseen since August 11. Overall traded volume was 23,511 lots of 25 tonnes each, slightly below the usual 25,000 lots as traders booked positions ahead of a holiday next week.
Malaysia's financial markets will be closed from the afternoon of August 29 to mark the Muslim festival of Eid, while Indonesian markets will close for the week. Markets are eyeing Bernanke's speech on Friday after 1400 GMT in hopes that he will make some comments about bolstering the world's largest economy, even though the Fed's options are limited.
Any failure to offer a clear hint of further monetary easing may trigger a fresh sell-off. Crude oil edged lower in Asian trade hours, dragging down other vegetable oils. US soyoil for September delivery fell 0.2 percent on Friday, but losses were capped by drier weather in the US midwest, which expected to stress pod-setting soybean crops. The most active May 2012 soyoil in China's Dalian Commodity lost 0.7 percent.