Oct. 8 (Bloomberg) -- Palm oil fell, snapping a three-day gain, on concern stockpiles in Malaysia, the largest producer after Indonesia, reached a record. Futures in Dalian dropped to the lowest since 2010 as the market reopened after a holiday.
The contract for December delivery fell 2 percent to close at 2,368 ringgit ($771) a metric ton on the Malaysia Derivatives Exchange. Prices dropped 5.2 percent last week after falling to the lowest close since November 2009 on Oct. 2.
Palm oil has declined 22 percent since the end of August as a global slowdown weakened demand for the oil used in candy to biofuel. Inventories in Malaysia probably increased 15 percent to a record 2.43 million tons in September from 2.12 million tons in August, the median of estimates from five analysts and two plantation companies showed. The Malaysian Palm Oil Board is scheduled to release the data on Oct. 10.
“The market is expecting higher stockpiles of at least 2.4 million tons,” said Ryan Long, vice president of futures and options at OSK Investment Bank Bhd. “Stocks will continue to build up at the end of this month,” he said.
Malaysia’s output climbed 10 percent to 1.83 million tons in September from 1.66 million tons the previous month, while exports rose 4.9 percent to 1.5 million tons from 1.43 million tons, the survey showed. Reserves reached an all-time high of 2.27 million tons in November 2008, according to the board.
Soybean oil for December delivery fell 0.5 percent to 50.95 cents a pound on the Chicago Board of Trade. Soybeans for November delivery dropped 0.8 percent to $15.3875 a bushel.
Palm oil for January delivery plunged 4.4 percent to close at 6,872 yuan ($1,093) a ton on the Dalian Commodity Exchange, the lowest level for the most-active contract since August 2010. Soybean oil for delivery in the same month fell 2.1 percent to 9,088 yuan a ton. Financial markets in China reopened today after a weeklong holiday.
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