MARKET DEVELOPMENT
Palm Oil Fluctuates as Prices Near One-Year High May Curb Demand
Palm Oil Fluctuates as Prices Near One-Year High May Curb Demand
14/1/2013 (Bloomberg) - Palm oil swung between gains and losses on concern that prices near a 13-month high may curtail consumer demand even as lower production trims stockpiles.
The contract for delivery in January rose and fell at least 0.5 percent before ending the morning session at 2,599 ringgit ($813) a metric ton on the Bursa Malaysia Derivatives in Kuala Lumpur. Futures advanced to 2,628 ringgit on Nov. 1, the highest close since September 2012 and 21 percent more than the 2,167 ringgit settlement on July 29, meeting the common definition of a bull market.
“The consumers want to digest these levels for a little bit and wait to see where prices are heading,” Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd., said by phone from Kuala Lumpur. “The stockpiles have not accumulated as high as earlier estimated.”
Stockpiles rose 3.5 percent in October to 1.85 million tons from a month earlier, below the 2.5 million tons a year earlier, data from the Malaysian Palm Oil Board showed this week. Production gained 3.1 percent to 1.97 million tons, while exports rose 3.3 percent to 1.66 million tons.
Palm will probably trade from 2,400 ringgit to 2,600 ringgit in coming months, Dorab Mistry, director at Godrej International Ltd., said at a conference in China today. Futures may rise to 2,800 ringgit on good biodiesel demand in Indonesia and poor output in January and February, he said. At 2,800 ringgit, demand would drop and prices would be set to decline in the second half, he said.
Soybean oil for December delivery was little changed at 41.24 cents a pound on the Chicago Board of Trade. Soybeans for delivery in January declined 0.6 percent to $13.0725 a bushel.
Refined palm oil for May delivery dropped 0.4 percent to 6,292 yuan ($1,033) a ton on the Dalian Commodity Exchange and soybean oil advanced 0.2 percent to 7,236 yuan.
The contract for delivery in January rose and fell at least 0.5 percent before ending the morning session at 2,599 ringgit ($813) a metric ton on the Bursa Malaysia Derivatives in Kuala Lumpur. Futures advanced to 2,628 ringgit on Nov. 1, the highest close since September 2012 and 21 percent more than the 2,167 ringgit settlement on July 29, meeting the common definition of a bull market.
“The consumers want to digest these levels for a little bit and wait to see where prices are heading,” Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd., said by phone from Kuala Lumpur. “The stockpiles have not accumulated as high as earlier estimated.”
Stockpiles rose 3.5 percent in October to 1.85 million tons from a month earlier, below the 2.5 million tons a year earlier, data from the Malaysian Palm Oil Board showed this week. Production gained 3.1 percent to 1.97 million tons, while exports rose 3.3 percent to 1.66 million tons.
Palm will probably trade from 2,400 ringgit to 2,600 ringgit in coming months, Dorab Mistry, director at Godrej International Ltd., said at a conference in China today. Futures may rise to 2,800 ringgit on good biodiesel demand in Indonesia and poor output in January and February, he said. At 2,800 ringgit, demand would drop and prices would be set to decline in the second half, he said.
Soybean oil for December delivery was little changed at 41.24 cents a pound on the Chicago Board of Trade. Soybeans for delivery in January declined 0.6 percent to $13.0725 a bushel.
Refined palm oil for May delivery dropped 0.4 percent to 6,292 yuan ($1,033) a ton on the Dalian Commodity Exchange and soybean oil advanced 0.2 percent to 7,236 yuan.