Gloomy economic sentiment pushed palm oil futures lower for a second day although the Malaysian physical market was offering vegetable oil at a premium, signalling that supply was starting to tighten on erratic weather. "Technically the market should do some correction today, after seeing the downward movement yesterday. The lower CBOT also played a part," said a trader with a foreign commodities brokerage in Kuala Lumpur. "But I doubt that the market could go much lower from 3,100 as the fundamentals - heavy rains and weather - can support this level," he added in reference to monsoon season that is getting aggravated by La Nina-driven rains. By the midday break, benchmark February palm oil futures on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 3,163 ringgit ($993) per tonne after going as low as 3,145 ringgit, a level last seen on Nov 11. Overall traded volumes stood at 14,119 lots of 25 tonnes each, higher than the usual 12,500 lots. Reuters analyst Wang Tao stuck to a bearish view, saying a target of 3,134 ringgit per tonne remains in place as seen by a wave pattern and a Fibonacci retracement analysis. Fundamentals can turn more bullish with media reports of heavy rains triggering some floods in the producing state of Johor which accounts for about a quarter of Malaysian output. Heavy rains tend to reduce harvesting rounds in oil palm estates and floods will complicate the transport of the edible oil to mills and refineries. "There have not been any delays in palm oil deliveries in the current scenario but yield quality is getting affected with the exposure to excess moisture," said a planter in Johor state. The market is bracing itself for low production in the last quarter due to a seasonal decline in yields and the prospects of a brewing La Nina weather condition making the seasonal monsoon rains worse. That could prompt a rush for cargoes as buyers in China, India and Pakistan want to restock after major festivals and public holidays. Export data showed firm growth. Brent crude held near $107 a barrel on Tuesday as fresh sanctions, and possible military action, against Iran offset persistent worries about the health of Western economies and fuel demand.