Malaysia's crude palm oil futures dropped 2.3 percent to their weakest closing in 12 weeks on Thursday ahead of a slew of industry data that may show weak exports and higher production, traders said. Selling pressures intensified in late trade prompted by a Reuters poll showing that Malaysian palm oil stocks rose 7.4 percent to a seven-month high in September, as production accelerated.
While exports dropped after big buyers reined in purchases. Reserves in the world's second largest palm oil producer have been rising since May and likely hit 1.52 million tonnes in September, the highest since February, poll respondents said ahead of official data to be released on Monday. Cargo surveyors will also announce their estimates for Malaysia's October 1-10 exports on Monday, which may also show a drop because of the absence of demand from top buyer China due to a long holiday.
"You have to jump now rather than wait until Monday because the market could drop further tomorrow if soybeans fall tonight. This time the market could break 2,000 ringgit," he added. The benchmark December contract on the Bursa Malaysia Derivative Exchange settled down 47 ringgit at 2,030 ringgit ($599.09) a tonne, the lowest close since July 16. Trade volumes were at 15,066 lots of 25 tonnes each. In the Malaysian physical market, palm oil for October delivery was traded at 2,075-2,100 ringgit in the southern region and at 2,070-2.090 ringgit in the central region.
INDONESIA PALM TRADES: In Indonesia, the state marketing centre based in Jakarta sold 8,500 tonnes of palm oil at a top price of 6,346 rupiah ($0.676) per kg against 6,377 rupiah a day earlier. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, sold palm oil at 6,285 rupiah per kg against 6,333 rupiah a day ago. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,400-6,450 rupiah per kg against 6,500 rupiah a day ago.
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