Palm falls 1pc to 1-week low on losses in soyoil

KUALA LUMPUR: Malaysian palm oil futures fell more than 1 percent on Wednesday, heading for a third consecutive day of declines, tracking losses in soyoil overnight on the Chicago Board of Trade (CBOT).

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 1.2 percent at 2,615 ringgit ($608.56) at the midday break. It earlier fell to a low of 2,608 ringgit, the weakest since Aug. 8.

Traded volumes stood at 21,227 lots of 25 tonnes each at noon.

"Palm followed the drop in the external market, which fell quite a lot last night," said a Kuala Lumpur based futures trader, referring to CBOT soyoil.

Palm oil prices are impacted by the movements in related edible oils including soy, as they compete for a share in the global vegetable oils market.

The trader said future production figures would provide further leads, as the extent of output gains could impact the market.

Malaysia's palm oil production in July saw a stronger-than-expected rise to 1.83 million tonnes, surging 20.7 percent from June. The output levels were the highest in almost two years, while monthly gains were the strongest since March 2015.

The palm oil November contract may retrace towards a support at 2,614 ringgit per tonne, following its failure to break a resistance at 2,687 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.

The October soybean oil contract on the Chicago Board of Trade fell to its lowest in over a month in trade on Tuesday, declining 2.1 percent in its sharpest intraday fall since Aug. 3. It was last up slightly 0.1 percent.

In other related oils, the January soybean oil on the Dalian Commodity Exchange fell 1.3 percent, while the January palm olein contract declined 1.7 percent.