Breaking News-RTRS - Stubbornly high stocks to drag on palm oil futures-Mistry

KUALA LUMPUR, July 28 (Reuters) - Palm oil futures KPOc3 could drop as low as 2,800 Malaysian ringgit ($947.55) in September as stocks in No. 2 producer Malaysia remain stubbornly high, a top analyst said on Thursday.
That represents a drop of around 29 percent from 2011 high of 3,967 ringgit in February as Godrej International's Dorab Mistry said a high output cycle remains in force and will lead to record high stocks for Malaysia by early December.
But price declines could be limited as a palm oil discount to competing soyoil would widen to a new 2011 peak of $250 per tonne, kicking in more demand, Mistry said. The narrowest discount stood at $2 per tonne in late February, according to Reuters data.