Malaysian palm oil futures slipped on Friday, despite posting a weekly gain of close to 5 percent, as traders booked profits from a large increase in the previous session, and slowing exports squeezed prices. Futures posted on Wednesday their sharpest daily gain since October 2010, moving off a near 3-year low struck on Monday.
Malaysian financial markets were closed on Tuesday and Thursday for the Hindu festival of Diwali and the Islamic New Year. "The market came down a bit as there was some profit-taking," a trader with a foreign commodities brokerage in Malaysia said, adding that prices seemed to be trading in a broad range of 2,300 to 2,500 ringgit. "Exports were also down and that could be another reason."
The benchmark February contract on the Bursa Malaysia Derivatives Exchange fell 1.3 percent to close at 2,429 ringgit ($791) per tonne. For the week, prices posted a gain of 4.9 percent, snapping two straight weeks of losses. Total traded volumes stood at 31,623 lots of 25 tonnes each, higher than the usual 25,000 lots. Palm oil faces a resistance at 2,447 ringgit per tonne, a break above which will lead to a further gain to 2,588 ringgit, Reuters market analyst Wang Tao said.
Exports of Malaysian palm oil products for November 1 to 15 fell 0.1 percent to 769,087 tonnes from 769,534 tonnes for the October 1-15 period, cargo surveyor Intertek Testing Services said on Friday. That came as a disappointment after exports rose as much as 22 percent for the November 1-10 period from a month ago, although some traders traced the slowdown to a slew of holidays this week.
Slowing exports may put pressure on Malaysia's record stocks, which hit 2.51 million tonnes in October, missing expectations for 2.67 million. In other vegetable oil markets, US soyoil for December delivery fell 1 percent in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed down 1.6 percent.