KUALA LUMPUR, July 17: Malaysian palm oil futures lost their footing after Chicago Board of Trade (CBOT) futures fell back in Asian trade following forecasts of scattered rains in the US Midwest this week, traders said on Wednesday.

At the close, the new benchmark third-month futures, October was 12 ringgit lower at 1,423 ringgit ($374.47) a ton after trading as high as 1,467 ringgit.

Overall volume declined to 5,046 lots compared with 9,664 lots on Tuesday.

One Tokyo dealer said the soybean market had been extremely overbought in recent trade on tight old crop supply and concerns about drier weather in the US Midwest.

He said there were some forecasts of scattered rains in United States crop growing area later this week and early next week.

Some traders in Kuala Lumpur said India may look for more palm oil after it bought up to 50,000 tons in the last few days, as erratic monsoon rains caused jitters in the world’s largest edible oil importer.

India’s Agriculture Ministry said this week it was worried over the progress of the monsoon rains and the impact it is having on rain-fed crops — mainly cereal, oilseeds and pulses.

My friend in India told me the country needs to buy an additional 150,000 tons of oil per month from now until the end of the year because of bad crop, said one dealer.

Traders said India’s edible oil imports could reach more than 500,000 tons a month from July onwards, up from 432,606 tonnes in June because of worries over scanty rains in several parts of the country.

Some traders said India purchased about 50,000 tons of palm oil from Friday to early this week.

Others put the amount at 120,000 tons. India also bought some 50,000 tons of South American soyaoil at $475 a tonne C&F, said some traders.

At the physical market, CPO’s July and August contracts saw bids at 1,435 ringgit a ton in the southern as well as as central regions against sale offers at 1,450 ringgit.

Trade was reported at 1,460 to 1,475 ringgit for July (south) and at 1,430 ringgit for central.—Reuters