MARKET DEVELOPMENT
Palm Drops From 14-Month High on Stronger Ringgit, Slow Exports
Palm Drops From 14-Month High on Stronger Ringgit, Slow Exports
10/12/2013 (Bloomberg) - Palm declined from a 14-month high as a strengthening currency reduced demand for futures denominated in the Malaysian ringgit and on speculation exports may slow during the winter in the Northern Hemisphere.
The February contract lost 0.8 percent to close at 2,648 ringgit ($826) a metric ton on the Bursa Malaysia Derivatives. Futures ended at 2,670 ringgit on Dec. 6, the highest since Sept. 21, 2012, on speculation production in Indonesia, the biggest supplier, may drop for the first time since 1998.
The ringgit strengthened by the most in two months after China, the nation’s second-largest export market, reported a pickup in overseas sales. Demand for the tropical oil usually slows in winter as it clouds in lower temperatures.
“When the ringgit is stronger, palm oil prices will be less attractive,” said Benny Lee, a market strategist at Jupiter Securities Sdn. in Kuala Lumpur. “There will probably be a drop in exports.”
Stockpiles in Malaysia, the second-largest producer, probably jumped 6.2 percent to 1.96 million tons, the highest level since March, as exports fell 5.4 percent to 1.57 million tons in November from a month earlier, according to a Bloomberg survey. Output may have dropped 2.6 percent to 1.92 million tons, the survey showed. The Malaysian Palm Oil Board is scheduled to release its data tomorrow.
Soybean oil for January delivery was little changed at 40.45 cents a pound on the Chicago Board of Trade. Soybeans climbed 0.5 percent to $13.3175 a bushel.
Refined palm oil for May delivery rose 1 percent to close at 6,244 yuan ($1,028) a ton on the Dalian Commodity Exchange. Soybean oil ended little changed at 7,222 yuan.
The February contract lost 0.8 percent to close at 2,648 ringgit ($826) a metric ton on the Bursa Malaysia Derivatives. Futures ended at 2,670 ringgit on Dec. 6, the highest since Sept. 21, 2012, on speculation production in Indonesia, the biggest supplier, may drop for the first time since 1998.
The ringgit strengthened by the most in two months after China, the nation’s second-largest export market, reported a pickup in overseas sales. Demand for the tropical oil usually slows in winter as it clouds in lower temperatures.
“When the ringgit is stronger, palm oil prices will be less attractive,” said Benny Lee, a market strategist at Jupiter Securities Sdn. in Kuala Lumpur. “There will probably be a drop in exports.”
Stockpiles in Malaysia, the second-largest producer, probably jumped 6.2 percent to 1.96 million tons, the highest level since March, as exports fell 5.4 percent to 1.57 million tons in November from a month earlier, according to a Bloomberg survey. Output may have dropped 2.6 percent to 1.92 million tons, the survey showed. The Malaysian Palm Oil Board is scheduled to release its data tomorrow.
Soybean oil for January delivery was little changed at 40.45 cents a pound on the Chicago Board of Trade. Soybeans climbed 0.5 percent to $13.3175 a bushel.
Refined palm oil for May delivery rose 1 percent to close at 6,244 yuan ($1,028) a ton on the Dalian Commodity Exchange. Soybean oil ended little changed at 7,222 yuan.