MARKET DEVELOPMENT
Palm Oil Declines for Fifth Straight Quarter on Rising Supplies
Palm Oil Declines for Fifth Straight Quarter on Rising Supplies
29/06/2013 (Bloomberg) - Palm oil fell for a third day, capping a fifth quarterly loss, on speculation that rising global oilseeds supplies may cut demand for the commodity used in everything from noodles to soaps.
The contract for September delivery fell 0.5 percent to 2,344 ringgit ($741) a metric ton on the Bursa Malaysia Derivatives, the lowest level at close for most-active futures since May 21. Futures lost 3.9 percent this week, the biggest drop since the five days ended March 29. Palm for local physical delivery in July was at 2,355 ringgit, data compiled by Bloomberg show.
Stockpiles of the most-used cooking oil are poised to jump 21 percent to a record 9.5 million tons in 2013-2014, U.S. Department of Agriculture data show. Supplies of soybean oil, the second most-consumed oil, will rise to a record for a fifth year to reach 44.6 million tons, the USDA predicts. Bumper crops from South America have pressured soybean oil prices and should limit upside for palm, Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., wrote in a report today.
“As the prospect for a good oilseed harvest for 2013-2014 in the northern hemisphere strengthens, palm prices are expected to further weaken from current levels, provided there are no unexpected weather disruptions,” analysts at Rabobank International wrote in a report e-mailed today. “An increased level of production and subdued demand present significant risk of stocks rebuilding,” the bank said.
Soybean oil for December delivery gained 0.3 percent to 45.34 cents a pound on the Chicago Board of Trade, rebounding from the lowest close for the most-active futures since October 2010, while soybeans for delivery in November were little changed at $12.76 a bushel.
Refined palm oil for January delivery gained 0.3 percent to end at 5,844 yuan ($952) a ton on the Dalian Commodity Exchange, while soybean oil ended little changed at 7,294 yuan.
The contract for September delivery fell 0.5 percent to 2,344 ringgit ($741) a metric ton on the Bursa Malaysia Derivatives, the lowest level at close for most-active futures since May 21. Futures lost 3.9 percent this week, the biggest drop since the five days ended March 29. Palm for local physical delivery in July was at 2,355 ringgit, data compiled by Bloomberg show.
Stockpiles of the most-used cooking oil are poised to jump 21 percent to a record 9.5 million tons in 2013-2014, U.S. Department of Agriculture data show. Supplies of soybean oil, the second most-consumed oil, will rise to a record for a fifth year to reach 44.6 million tons, the USDA predicts. Bumper crops from South America have pressured soybean oil prices and should limit upside for palm, Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., wrote in a report today.
“As the prospect for a good oilseed harvest for 2013-2014 in the northern hemisphere strengthens, palm prices are expected to further weaken from current levels, provided there are no unexpected weather disruptions,” analysts at Rabobank International wrote in a report e-mailed today. “An increased level of production and subdued demand present significant risk of stocks rebuilding,” the bank said.
Soybean oil for December delivery gained 0.3 percent to 45.34 cents a pound on the Chicago Board of Trade, rebounding from the lowest close for the most-active futures since October 2010, while soybeans for delivery in November were little changed at $12.76 a bushel.
Refined palm oil for January delivery gained 0.3 percent to end at 5,844 yuan ($952) a ton on the Dalian Commodity Exchange, while soybean oil ended little changed at 7,294 yuan.