MARKET DEVELOPMENT
Palm Oil Trades Near Seven-Week High as Stockpiles Seen Dropping
Palm Oil Trades Near Seven-Week High as Stockpiles Seen Dropping
29/05/2013 (Bloomberg) - Palm oil climbed to the highest level in almost seven weeks on speculation that stockpiles in Malaysia may drop for a fifth month as output declines in the world’s second-biggest producer.
The contract for August delivery advanced as much as 0.4 percent to 2,391 ringgit ($787) a metric ton on the Bursa Malaysia Derivatives, the highest level for the most active contract since April 10, and ended the morning session at 2,384 ringgit. Futures are up 4.3 percent this month, heading for the first monthly gain in four, on expectation demand may rebound ahead of the Muslim fasting month of Ramadan, which starts in July this year.
Malaysian reserves have dropped 27 percent to 1.93 million tons last month from a record in December, according to data from the nation’s palm oil board. Output rose 3.1 percent to 1.37 million tons in April, board data shows.
“The market talk is that the production is down 4 to 5 percent in the first 20 days of this month -- this is below what the planters expected,” Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. “That’s providing underlying support for the market.”
Inventories may drop about 8 percent this month if output falls and exports remain little changed, Chandran said.
Shipments from Malaysia fell 2.1 percent to 1.06 million tons in the first 25 days of May from the same period in April, surveyor Societe Generale de Surveillance said yesterday. That compares with an 18 percent decline in the first 10 days.
Refined palm oil for September delivery gained 0.3 percent to 6,148 yuan ($1,004) a ton on the Dalian Commodity Exchange, while soybean oil fell 0.5 percent to 7,480 yuan.
On the Chicago Board of Trade, soybeans for July delivery climbed 0.5 percent to $14.84 a bushel and soybean oil for the same month rose 0.4 percent to 49.42 cents a pound.
The contract for August delivery advanced as much as 0.4 percent to 2,391 ringgit ($787) a metric ton on the Bursa Malaysia Derivatives, the highest level for the most active contract since April 10, and ended the morning session at 2,384 ringgit. Futures are up 4.3 percent this month, heading for the first monthly gain in four, on expectation demand may rebound ahead of the Muslim fasting month of Ramadan, which starts in July this year.
Malaysian reserves have dropped 27 percent to 1.93 million tons last month from a record in December, according to data from the nation’s palm oil board. Output rose 3.1 percent to 1.37 million tons in April, board data shows.
“The market talk is that the production is down 4 to 5 percent in the first 20 days of this month -- this is below what the planters expected,” Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. “That’s providing underlying support for the market.”
Inventories may drop about 8 percent this month if output falls and exports remain little changed, Chandran said.
Shipments from Malaysia fell 2.1 percent to 1.06 million tons in the first 25 days of May from the same period in April, surveyor Societe Generale de Surveillance said yesterday. That compares with an 18 percent decline in the first 10 days.
Refined palm oil for September delivery gained 0.3 percent to 6,148 yuan ($1,004) a ton on the Dalian Commodity Exchange, while soybean oil fell 0.5 percent to 7,480 yuan.
On the Chicago Board of Trade, soybeans for July delivery climbed 0.5 percent to $14.84 a bushel and soybean oil for the same month rose 0.4 percent to 49.42 cents a pound.