Malaysian palm oil pares some losses

Malaysian palm oil futures pared some losses on Monday during the second half of trade, as official data showed lower-than- forecast inventory levels, but still ended lower after falling as much as 1 percent. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 0.3 percent at 2,034 ringgit ($485.91) a tonne at the end of the trading day, charting a fifth consecutive day of losses.
It earlier fell as much as 1.6 percent to 2,008 ringgit in early trade, its lowest levels since September 2015.
Trading volumes stood at 55,220 lots of 25 tonnes each at the close of trade.
"Stocks came in much lower than we had forecast," said a Singapore based futures trader, explaining why the market had reversed some of its losses in the second half of trade.
The Malaysian Palm Oil Board released official stocks, production and export data for October at the market's midday break on Monday.
Stockpiles grew 7.6 percent to 2.72 million tonnes, while production gained 6 percent to 1.96 million tonnes. Meanwhile, exports fell 3 percent to 1.57 million tonnes from September.
"Inventory levels, which are lower than expected, will help support the market for awhile, but November and December inventories are still expected to go up," said another trader, adding that weaker palm olein on China's Dalian Commodity Exchange also weighed on the market earlier in the day.
A Reuters survey earlier forecast palm oil's end-October stockpiles to rise 14.1 percent to 2.90 million tonnes.
In other related edible oils, the Chicago December soyabean oil contract was up 0.3 percent, while the January soyabean oil contract on the Dalian Commodity Exchange slipped 0.4 percent.
Meanwhile, the January palm oil contract fell 1 percent.
Palm oil prices are affected by movements of other edible oils as they compete for a share in the global vegetable oil market. Palm oil is expected to test a support at 2,036 ringgit per tonne, a break below which could cause a loss into 1,996-2,016 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.