Malaysian palm oil futures ended lower on Friday, reversing gains as investors booked profits from prices that soared to more-than-one-year highs, while prospects of higher output from the world's top producer weighed on the market. Indonesia's palm oil output will jump 13 percent to 29.5 million tonnes next year as more maturing plantation areas are harvested, the Indonesian Palm Oil Board said, expecting that to push average prices lower.
Malaysia's industry regulator expects its production in the No.2 grower to hit 19.5 million tonnes in 2014 as replanting schemes take root.
Prices had hit 2,692 ringgit in early trade, their highest in more than a year, fuelled by estimates for tighter stockpiles that could continue to fall next year.
Traders said the surge in prices could also narrow palm oil's discount to other oilseeds, and shift demand to competing soyoil
"The new high also brought in some profit-taking before the weekend," said a trader with a local commodities brokerage.
By Friday's close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had lost 0.4 percent to 2,640 ringgit ($825) per tonne.
Total traded volume stood at 42,487 lots of 25 tonnes each, much higher than the average 35,000 lots.
But the fall in prices was not enough to eat into weekly gains. Palm rose 1.0 percent this week, its second straight weekly rise.
Technicals were bullish. Malaysian palm oil is expected to rise to 2,716 ringgit per tonne, driven by a wave C, said Reuters market analyst Wang Tao.
In competing vegetable oil markets, the US soyoil contract for December fell 0.5 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange rose 0.8 percent.