KUALA LUMPUR, June 10: Malaysia’s palm oil futures tumbled on Monday with the benchmark August contract ending near limit-down after disappointing exports data and declines in the soyoil market sparked heavy liquidation.

At the close, third-month August contract was down 81 ringgit at 1,407 ringgit ($370.26) a ton after trading as high as 1,475 ringgit.

The contract, the limit-down level of which is at 1,388 ringgit, had touched a low of 1,405 ringgit. Volume was heavy at 4,169 lots.

Cargo surveyor SGS said Malaysian palm oil exports for June 1-10 stood at 240,327 tons, down slightly from 248,631 tons for May 1-10. The number was below market expectations of 300,000 tons.

Everybody is long. Everybody is in an overbought situation, said one trader in Kuala Lumpur.

Another trader said: It seems profit-taking has turned into technical correction. It’s possible for the market to fall again tomorrow.

Chicago Board of Trade (CBOT) soyaoil futures closed down 0.25 to 0.34 cent per lb on Friday, with July down 0.33 cent at 18.40 and August down 0.34 cent at 18.49.

Freight brokers said Malaysia’s exports could pick up in the next five days because of good vessels bookings, especially for shipments to main buyers India and Pakistan.

We are talking about good exports for June 1-15. So far vessels bookings for shipments to India and Pakistan for the next five days are very encouraging, said one broker.

The SGS said India was the biggest buyer of Malaysian palm oil for June 1-10, taking 73,386 tons, followed by China, which bought 57,116 tons and the Middle East with 19,100 tons.

European Union countries bought 16,695 tons amongst them, it added.

Traders said palm oil, currently the world’s most-favoured edible oil, had at least until August to shine before output picked up in main producers Malaysia and Indonesia and crisis-hit Argentina started selling more soyaoil.

They said the palm oil futures were overbought and driven by speculation because the market had factored in fundamentals such as lower palm oil output and financial chaos in Argentina.

Physical June/July contracts for the southern and central regions was offered at 1,430 ringgit a ton against bids of 1,420 ringgit. Deals were done at 1,430 to 1,450 ringgit a ton for June (south and central).—Reuters