JAKARTA: Malaysian palm oil futures fell on Wednesday, as traders booked profits following early gains that were triggered by a drop in November stockpiles.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost RM16, or 0.32 per cent, to RM4,935 (US$1,115.25) a metric tonne by the midday break.
Malaysia's palm oil stockpiles dropped for a second consecutive month in November, falling 2.6 per cent from the prior month to 1.84 million tonnes, data from the Malaysian Palm Oil Board (MPOB) showed on Tuesday. The drop in inventories could fuel a rally in benchmark futures.
Crude palm oil production declined 9.8 per cent in November to 1.62 million tonnes, the lowest for the month since 2020, while palm oil exports plunged 14.7 per cent to 1.49 million tons, the board said.
Dalian's most-active soyoil contract rose 1.11 per cent, while its palm oil contract fell 1.34 per cent. Soyoil gained 0.44 per cent at the Chicago Board of Trade.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Cargo surveyor Intertek Testing Services said on Tuesday that exports of Malaysian palm oil products for Dec. 1-10 rose 3.9 per cent, while according to independent inspection company AmSpec Agri Malaysia it rose 1.1 per cent.
Oil prices climbed on Wednesday, with market participants expecting demand to rise in the world's largest crude importer, after Beijing announced a looser monetary policy to stimulate economic growth in China.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil is expected to stabilise around support at RM4,915 per metric tonne and test resistance at RM4,983, Reuters technical analyst Wang Tao said.