03/08/2011 (Bloomberg) - Palm oil fell, following the steepest gain in two weeks yesterday, on concern that the U.S. economy is slowing even as lawmakers agreed to raise its debt ceiling.

The October-delivery contract dropped 0.2 percent to 3,114 ringgit ($1,052) a metric ton on the Malaysia Derivatives Exchange. Futures gained 0.8 percent yesterday, the most since July 20.

The debt issue isn’t “over yet because this is kind of a temporary measure,” Donny Khor, senior vice president for futures & options at OSK Investment Bank Bhd., said by phone from Kuala Lumpur. “Whether it will be cured, I don’t think so, it will continue.”

Palm oil’s trading is expected to be “range-bound” between 3,080 ringgit and 3,180 ringgit in the near term. A report today is forecast to show that personal spending stagnated in June, after data yesterday showed a gauge of manufacturing weakened to a two-year low.

Concern is shifting to the slowing U.S. recovery after the House of Representatives approved legislation to raise the federal debt limit, a day before a possible default. The Senate will vote on the proposal today.

Malaysia’s palm oil exports climbed 13 percent to 1.63 million tons in July from 1.44 million tons in June, independent market surveyor Intertek said July 30. Shipments rose 13.5 percent in July to 1.63 million tons compared with the previous month, Societe Generale de Surveillance estimated yesterday.

“Yesterday it went up sharply, overbought,” Chandran Sinnasamy, head of trading at LT International Futures (M) Sdn., said from Kuala Lumpur. “This is just reconsolidating.”

Soybean oil for December delivery advanced as much as 0.6 percent to 57.24 cents per pound in Chicago. Soybeans for delivery in November gained as much as 0.6 percent to $13.705 per bushel before trading little changed at $13.6175.

Palm oil for May delivery closed little changed at 9,228 yuan ($1,433) a ton on the Dalian Commodity Exchange and soybean oil for delivery in the same month was also little changed at 10,330 yuan a ton.