"With falling ringgit, palm should have been trading on higher side, but weakness in competing oils is not allowing it to rise," said a Kuala Lumpur-based futures trader. The January soyaoil contract on the Dalian exchange fell 1.62%, while the Dalian January palm oil contract dropped 2.23%. Soyabean oil on the Chicago Board of Trade fell 0.53%.
Palm oil stocks were depleting in the last few months but that pace could moderate as exports have started to falter, said a palm oil trader based in Kuala Lumpur. Malaysia's palm oil stockpiles at the end of August declined 5.3% from the previous month to 2.25 million tonnes, industry regulator the Malaysian Palm Oil Board said last week. But exports of Malaysian palm oil products for Sept. 1-15 fell 6.8% to 700,935 tonnes from 752,470 tonnes shipped during Aug. 1-15, cargo surveyor Societe Generale de Surveillance said on Wednesday.
Palm oil may break a support at 2,254 ringgit per tonne and fall to the next support at 2,219 ringgit, Wang Tao, a Reuters market analyst for commodities technicals said. Meanwhile, oil prices rose sharply, supported by supply risks brought about by last weekend's drone attacks on Saudi oil infrastructure and a cut in US interest rates.