Malaysian palm oil futures slipped 0.3 percent on Wednesday as expectations of record stocks in November weighed on sentiment, although traders are looking at higher exports and slowing output this month. Traders are counting on demand to kick in as forward palm oil futures are at a discount to the 3-month benchmark on high stocks. A Reuters survey showed palm oil stocks in November probably grew 2.8 percent to a record 2.58 million tonnes.
More orders are expected from China, the world's No 2 edible oil buyer, before the government imposes stricter quality rules on palm oil cargoes from January 2013. Higher exports could support palm oil futures that have lost nearly 28 percent this year in their worst annual performance since the 2008 financial crisis. "The market dropped a little on stocks, the bottom is nearing. We can't be going any lower as exports are going higher in December and production will come off," said a trader with a foreign commodities brokerage.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled down 0.3 percent at 2,287 ringgit ($750) per tonne after treading higher in the morning session. The previous day, the contract fell to 2,279, its lowest since November 12. Total traded volumes rose to 37,113 lots of 25 tonnes each, compared to the usual 25,000 lots. In palm oil's competing markets, US soyaoil for December delivery edged up 0.5 percent as traders grew concerned that unfriendly crop weather would cut global soy supplies. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange also rose 0.7 percent.