Aug. 17 (Bloomberg) -- Palm oil futures fell for a second day to the lowest level in more than a week, hurt by declines in rival soybean oil and speculation that inventories may gain in Malaysia, the second-biggest grower. November-delivery futures dropped as much as 1.5 percent to 2,637 ringgit ($835) a metric ton on the Malaysia Derivatives Exchange. The November contract, which yesterday climbed to a record, traded at 2,648 ringgit at 4:35 p.m. in Kuala Lumpur. “Palm is being guided by external markets like soybeans,” said Ryan Long, a dealer at OSK Investment Bank Bhd. “It’s healthy to have a correction after the market ran up so much on weather concerns. The market seems to have fully priced in the weather premium.” The tropical commodity has jumped 17 percent from an eight- month low on July 7 on concerns that excessive rains may reduce output in Indonesia and Malaysia, the two top producers, and dry weather may curb soybean yields in the U.S. Soybeans fell for the first time in three sessions yesterday on the Chicago Board of Trade on speculation that a drop in crude prices will erode demand for biofuels made from the oilseed. November-delivery futures fell 1.2 percent to close at $10.315 a bushel yesterday, the biggest decline since Aug. 10. The oilseed rose as much as 0.3 percent to $10.35 today. December-delivery soybean oil tumbled 2.5 percent to 42.07 cents a pound yesterday after reaching the highest level since Oct. 3, 2008 in intraday trading. The most-active contract gained 0.8 percent to 42.39 cents at 4:40 p.m. in Singapore. On the Dalian Commodity Exchange, January-delivery palm oil fell 0.3 percent to 7,266 yuan ($1,069) a ton, the first decline in four sessions. May-delivery soybean oil lost 0.5 percent to 8,276 yuan. Malaysian Supplies Malaysia’s palm oil exports fell 16.4 percent in the first 15 days of August to 592,094 tons compared with the same period in July, surveyor Societe Generale de Surveillance said yesterday. Shipments dropped 7.4 percent to 619,435 tons, rival surveyor Intertek said. “Exports are down and we may see a pickup in inventory,” OSK’s Long said. Malaysia’s inventory of the vegetable oil, used mostly in cooking, fell to a one-year low of 1,405,740 tons last month, the lowest level since July last year, the Malaysian Palm Oil Board said on Aug. 10. CME Group Inc.’s December-delivery palm oil contract, pegged to the Malaysian- benchmark price, dropped 0.4 percent to $831 a ton. --Editors: Jake Lloyd-Smith, Ravil Shirodkar To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net

Source