Malaysian palm oil futures dropped on Wednesday evening in their sharpest decline in a week, tracking weaker performing soyaoil and on forecasts of falling exports. Benchmark palm oil futures for December on the Bursa Malaysia Derivatives Exchange fell 1.7 percent to 2,556 ringgit ($618) a tonne at the close of trade.
Prices dropped as low as 2,554 ringgit in late trade, its weakest since September 15, recording a second consecutive decline after two previous winning sessions. Traded volumes stood at 58,119 lots of 25 tonnes each on Wednesday evening, higher than the 2015 daily average of 44,600 lots. "Today the market is down on the Chicago Board of Trade's soyaoil weakness and technical range trading, as palm is awaiting new leads," said one trader from Kuala Lumpur.
The soyabean oil December contract on the Chicago Board of Trade was down 0.9 percent. Palm's prices are impacted by its rival oilseed soya, as they both compete for a share in the global vegetable oils market. Palm shipments from Malaysia, the world's No 2 producer of the tropical oil fell between 15 to 16 percent for the full month of September due to lower demand from top consumers China and India, cargo surveyor data showed.
Demand is seen slowing in the final quarter of the year when consumers in the northern hemisphere switch to soyaoil, as palm solidifies in colder temperatures. September data from industry regulator the Malaysian Palm Oil Board is scheduled for release next Monday. Palm oil is still targeting its September 14 low of 2,547 ringgit per tonne, according to technical analysis by Reuters market analyst for commodities and energy technicals Wang Tao.
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