Malaysian palm oil futures reversed earlier gains to a two-month top and closed down 2 percent on Tuesday, hurt by a technical correction following a sharp rally in the past three weeks. The benchmark November palm oil contract on the Bursa Malaysia Derivatives Exchange closed at 2,148 ringgit ($498.95) a tonne, off the day's high of 2,207 ringgit, its loftiest since July 22.
Traded volume stood at 45,911 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day. The market often eases ahead of a change of the futures contract forward month, said a trader based in Kuala Lumpur. "The time is also right for some adjustments, as the market is overbought," the trader added. Prices have risen nearly 8 percent so far this month, the most since September last year, spurred by strong exports.
Malaysian palm products exports rose 6.9 percent during the first half of September from a month earlier, cargo surveyor Intertek Testing Services said on Tuesday. Palm oil prices are now targeting 2,244 ringgit, as they have broken a resistance at 2,171 ringgit, said Reuters market analyst Wang Tao. In other vegetable oil markets, the most active January soybean oil contract on the Dalian Commodity Exchange lost 0.1 percent, while the US December soyoil contract was down 0.5 percent.