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KUALA LUMPUR, Nov 7 (Reuters) -
Malaysian palm oil futures fell to a
one-week low on Thursday, stretching losses into a third day as investors
continued to take profits from last week's steep gains, but prices were stuck
in a range ahead of key output and
inventory data. Production in Southeast Asia, which accounts for nearly all of
the world's palm oil supply, may have tapered off sooner than expected this
year as the monsoon season hampered harvesting.
Investors are eyeing data from
Malaysia -- the world's No.2 producer -- on palm oil stocks, exports and output
in October that will be released by industry regulator the Malaysian Palm Oil
Board on Nov. 11. "The market is quiet. Prices are moving in a 2,550-2,600
ringgit range as investors wait for new leads," said a trader with a
foreign commodities brokerage. A Reuters survey showed that Malaysian palm oil
stocks probably inched up to 1.82 million tonnes in October, with the increase
in inventories limited by lower output of the tropical oil that was predicted
to have dropped by 3.3 percent.
By Thursday's close, the benchmark
January contract on the Bursa Malaysia Derivatives Exchange had edged down 0.2
percent to 2,543 ringgit ($800) per tonne. Palm oil prices, which traded in a
range of 2,525-2,562 ringgit, have shed 3.2 percent so far this week after last
week's almost 8 percent gain, the biggest such rise since 2010. Total traded
volume stood at 46,772 lots of 25 tonnes each on Thursday, higher than the
usual 35,000 lots. Technicals were bearish. Malaysian palm oil is expected to
break support at 2,544 ringgit per tonne and fall further towards 2,491
ringgit, Reuters market analyst Wang Tao said.
The price of the tropical oil could
however get a boost from prospects of a drop in output and stronger Asian
demand. China, the world's second-biggest palm oil buyer, is expected to begin
re-stocking the edible oil ahead of its Lunar New Year festival celebrated at
the end-January. "We would expect China to increase palm oil imports in
the upcoming months, especially after the winter season," said Phillip Futures analyst Tan Chee Tat in a note
on Thursday.
In competing vegetable oil markets,
the U.S. soyoil contract for December fell 0.2 percent in late Asian trade. The
most-active May soybean oil contract on the Dalian Commodities Exchange fell
0.3 percent.
In other markets, Brent crude fell
below $105 a barrel to its lowest since
early July as plentiful supplies and continued progress in talks between Iran and the West
over Tehran's disputed nuclear programme weighed on prices.