Palm drops over 1pc on bearish data, soyoil weakness

KUALA LUMPUR: Malaysian palm oil futures fell more than 1 percent in its fourth straight session of losses on Wednesday evening, tracking weakness in soyoil and bearish data for August released by the Malaysian Palm Oil Board (MPOB).

Palm oil stockpiles in August rose 12.4 percent from a month earlier to 2.49 million tonnes, while production gained 7.9 percent to 1.62 million tonnes, data released by the industry regulator during the midday break showed.

Exports fell 8.1 percent to 1.1 million tonnes, weaker than market expectations.

A Thomson Reuters poll had forecast August output to rise 9.9 percent to 1.65 million tonnes, raising inventory levels to a six-month top of 2.41 million tonnes.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 1.3 percent at 2,237 ringgit ($540.08) a tonne at the close of trade, its sharpest daily decline in a month.

Earlier in the session, it fell to 2,231 ringgit, its lowest levels since Aug. 30.

Trading volumes stood at 36,251 lots of 25 tonnes each at the close of trade.

"The market fell on the MPOB data combined with lower CBOT," said a futures trader in Kuala Lumpur, referring to soyoil on the US Chicago Board of Trade.

The Chicago September soybean oil contract declined 1.1 percent on Tuesday as export concerns, highlighted by a

fresh cancellation of a deal for US supplies, weighed on the market. It was trading flat at 0443 GMT.

Meanwhile, the January soybean oil contract on China's Dalian Commodity Exchange edged down 0.2 percent, while the Dalian January palm oil contract was 0.7 percent lower.

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

Palm oil may fall to 2,245 ringgit per tonne as it has broken a support at 2,274 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.