Palm falls to one-week low on overnight soyoil losses

KUALA LUMPUR: Malaysian palm oil futures fell to their lowest level in more than a week with a second consecutive day of losses on Wednesday, tracking US soyoil losses on the Chicago Board of Trade (CBOT).

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 0.8 percent at 2,200 ringgit ($528.15) a tonne at the close.

It earlier fell as much as 1.3 percent to 2,189 ringgit, its lowest since Oct. 15.

Trading volumes stood at 28,065 lots of 25 tonnes each at the close of trade.

"The (palm) market is impacted by spillovers in night weakness from CBOT soyoil and weakness in China's Dalian Commodity Exchange," a Kuala Lumpur-based trader said, adding that forecasts of rising production in October also weighed on the market.

Malaysian palm oil production is forecast to rise in the last quarter of the year in line with the seasonal trend before tapering off early next year.

September inventories rose to their highest in eight months as production came in higher than exports. September production rose 14.4 percent from August to its strongest in 10 months at 1.85 million tonnes. That was also the highest September level since 2015.

Another trader added that sharp overnight losses in crude oil had also weighed on palm. Oil prices plunged about 5 percent on Tuesday to two-month lows as a sell-off in global equity markets raised worries about demand growth and after Saudi Arabia said it could supply more crude quickly if needed.

In related oils, the Chicago December soybean oil contract declined 1.3 percent on Tuesday after the US Department of Agriculture said the US harvest was making faster progress than expected.

It was last down 0.1 percent on Wednesday.

Meanwhile, the January soybean oil contract on the Dalian Commodity Exchange fell as much as 1.3 percent while the January palm oil contract dropped 1.6 percent.

Palm oil prices are affected by movements of other edible oils that compete in the global vegetable oils market.

Palm oil could break support at 2,219 ringgit a tonne and fall to the next support at 2,199 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.