Global vegetable oil markets fell sharply on Monday, infected by a sell-off in grains markets after a report of larger-than-expected US corn stockpiles. US Department of Agriculture (USDA) said last week the US corn stockpile hit its largest level in four years as the autumn harvest opened in September.
-- Malaysia palm at lowest since September 17
-- China markets shut till Friday
And this week the grains markets continued their selloff, dragging on Malaysia's benchmark palm oil prices which dropped 2.5 percent to close at 2,666 ringgit ($864.2) after touching a two-week low.
US October soyaoil dropped 0.8 percent."The drop in Malaysia palm oil could be a one day effect as the market is still supportive," said a trader with foreign brokerage in Kuala Lumpur. Malaysian palm oil stocks now stand at around 1.7 million tonnes, Commodities Minister Bernard Dompok said on Monday.
That represents a 1.3 percent drop from August levels probably due in part to strong exports outpacing a seasonal rise in output in the world's No 2 producer of the vegetable oil. Malaysia's second-largest planter IOI Corp said benchmark palm oil prices could hit 3,000 ringgit if the La Nina phenomenon spins out of control.
A trader pegged Malaysian palm oil to trade between 2,650 to 2,700 ringgit on Monday. A Reuters analysis forecast the market to retrace to between 2,600 ringgit and 2,588 ringgit per tonne. China's financial markets remain closed until Friday for National Day break.
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