Palm oil drops to 11-week low

Palm oil tumbled to the lowest level in about 11 weeks, following declines in commodities and stocks after the Securities and Exchange Commission sued Goldman Sachs Group Inc. for fraud and China curbed property loans.

July-futures declined 1.9 per cent to 2,470 ringgit ($766) a tonne, the lowest price for the most-active contract on the Malaysia Derivatives Exchange since February 2.

The MSCI Asia Pacific Index declined 2 per cent to 125.70 at 7:39 pm. Tokyo time, the most since February 19. Copper, crude oil, corn, soybeans and other commodities dropped today.

“The weakness is coming from the external markets,” said Ryan Long, a trader at OSK Investment Bank Sdn. in Kuala Lumpur. “The market has been struggling to hold above 2,500 ringgit.”

Goldman Sachs shares plummeted 13 per cent on April 16 after the SEC said the most-profitable Wall Street firm in history mis-stated key facts about collateralized debt obligations tied to subprime mortgages. China told banks to stop loans for third- home purchases in cities with excessive property gains and to suspend lending to buyers who can’t provide tax returns or proof of social security contributions.

In China, the largest consumer of edible oils, palm oil for September delivery lost 1.4 per cent to 6,888 yuan ($1,009) a tonne on the Dalian Commodity Exchange. Soybean oil lost 0.7 per cent to 3,872 yuan.

Should Malaysian palm oil, the industry benchmark, fail to stay above 2,500 ringgit, technical charts suggest it could drop to 2,403 ringgit and “possibly towards the 2,200 support level,” said a RHB Research Institute Sdn. report today, referring to a price where buy orders cluster. The price hasn’t been that low since November 3.

Indonesia, the largest producer of palm oil, accepted bids for 8,500 tonnes of the commodity in auctions today for between 7,153 rupiah a kilogram ($791 a ton) and 7,250 rupiah a kilogram.