KUALA LUMPUR: Malaysian palm oil futures stretched losses into a second session on Monday to hit a more than one-week low, weighed down by falls in competing markets overseas and further technical correction.

Although palm’s demand outlook has brightened, thanks to an export duty cut on its crude grade, as well as anticipation that output may have already peaked in August, traders said the rally in benchmark prices had to be reined in.

Market participants said Malaysian palm oil, which last week notched up a third straight weekly gain, has been overbought after sliding to a five-and-a-half-year low of 1,914 ringgit per tonne on Sept 2.

“Right now what we are seeing is some much needed technical correction coming in, despite the fact that palm fundamentals are improving,” said a trader with a foreign commodities brokerage in Kuala Lumpur.

Published in Dawn, September 23rd , 2014