14/09/2011 (Gulfnews.com) - Palm oil dropped the most in more than two weeks after soybeans fell Tuesday on a government report that showed world stockpiles and US production will be higher than previous estimates.

The November-delivery contract on the Malaysia Derivatives Exchange declined 1.8 per cent to 3,017 ringgit ($988) per metric ton, the steepest intraday drop since August 25, in Kuala Lumpur Tuesday.

Global inventories before the 2012 harvest will reach 62.55 million tonnes, compared with 60.95 million estimated in August and 68.82 million this year, the US Department of Agriculture said on Monday. Farmers in the US, the world's biggest grower and exporter, will harvest 3.085 billion bushels this year, above the 3.032 billion expected and up from 3.056 estimated in August.

"The USDA increased production forecast which was not expected by the market, so soybean came under pressure," Chandran Sinnasamy, trading head at LT International Futures, said in Kuala Lumpur. "The bearish USDA report for soybeans dragged crude palm oil down today," he said.