Malaysian palm oil futures edged down on Wednesday to touch their lowest since October as losses in soyoil markets overseas and a firm ringgit dragged, although prospects of smaller supplies of the vegetable oil provided support. The benchmark September contract on the Bursa Malaysia Derivatives Exchange touched 2,361 ringgit in late trade, its lowest since October 14, before settling at 2,375 ringgit ($749) per tonne at close on Wednesday, a 0.4 percent drop.
Total traded volume stood at 49,488 lots of 25 tonnes, above the usual 35,000 lots. "Falling soybean oil prices should let the day bears check the nearest low of 2,362 ringgit," said a trader with a local commodities firm in Kuala Lumpur. The US soyoil contract fell 0.6 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange lost 1.6 percent. Technicals showed Malaysian palm is expected to fall to 2,358 ringgit per tonne, driven by a wave 3, said Reuters market analyst Wang Tao. This is the third wave of a five-wave cycle that developed from the June 25 high of 2,511 ringgit. Market participants are pinning hopes for an official industry report to show that output and stocks in Malaysia, the world's No 2 palm grower, fell in June. A Reuters survey forecast Malaysia's June-end stocks to drop to 1.8 million tonnes.
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