Malaysian palm oil futures dropped on Friday to their lowest in more than 11 months, posting their worst week since March last year as rising inventories and overnight losses in US soybeans weighed on prices. "The overseas market was down yesterday and this morning the Dalian market was down, so the futures market is under tremendous pressure on long liquidation and speculative short-selling," said a trader with a foreign commodities brokerage in Malaysia.
At the close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had lost 2 percent to 2,763 ringgit ($905) per tonne, slightly above the intraday low at 2,755 ringgit, a level unseen since October 6. The prices broke below the 2,800-ringgit mark for the first time this year and posted a 5.9 percent loss this week.
Total traded volume stood at 37,030 lots of 25 tonnes each, much higher than the usual 25,000 tonnes. Technicals continued to look bearish with Reuters market analyst Wang Tao saying palm oil would keep falling to 2,719 ringgit per tonne based on a wave analysis. Latest cargo surveyor data pointed to rising exports but traders said the increase was not enough to offset strong production, which could push September stocks even higher than the 10-month high of 2.1 million tonnes seen in August.
Cargo surveyor Intertek Testing said export shipments rose almost 15 percent during September 1-20 over the same period a month ago, while another cargo surveyor, Societe Generale de Surveillance, reported an almost 13 percent increase from a month ago. In other vegetable oil markets, US soyoil for December delivery lost 0.2 percent. The most active January 2013 soyoil contract on the Dalian Commodity Exchange had closed 1.5 percent down.