MARKET DEVELOPMENT
Palm Oil Gains as Stockpiles in Malaysia Seen Extending Decline
Palm Oil Gains as Stockpiles in Malaysia Seen Extending Decline
11/04/2013 (Bloomberg) - Palm oil gained on speculation that inventories in Malaysia, the world’s second-biggest producer, may decline for a fourth month as demand rebounds.
The contract for June delivery advanced as much as 0.3 percent to 2,379 ringgit ($784) a metric ton on the Bursa Malaysia Derivatives exchange, and ended the morning session at 2,377 ringgit in Kuala Lumpur. Futures have lost 34 percent in the past year.
Inventories shrank 11 percent to 2.17 million tons in March from 2.44 million tons in February, the steepest monthly drop since January 2011, the Malaysian Palm Oil Board said yesterday. Stockpiles may fall to 2.01 million tons by the end of this month, according to Sebastian Tobing, an analyst with UBS AG, while Kenanga Investment Bank Bhd. predicts a drop to 1.98 million tons.
“Demand from the northern hemisphere should improve month- on-month except for China, which may slow down its purchase after a strong pick-up last month,” Alan Lim Seong Chun, an analyst at Kenanga, wrote in a report today. “We expect crude palm oil prices to recover in the second quarter to 2,800 ringgit a ton as we expect a sustained decline in the inventory level to 1.82 million tons by June.”
Output climbed 2.2 percent to 1.33 million tons in March, while exports increased 10 percent to 1.54 million tons, the board said yesterday. Shipments to China jumped 77 percent to 418,059 tons in March from a month earlier, board data shows.
Exports from Malaysia climbed 3.5 percent to 456,440 tons in the first 10 days of April from the same period in March, Intertek said yesterday. Exports gained 5.4 percent to 462,276 tons, said Societe Generale de Surveillance.
Soybean oil for July delivery lost 0.3 percent to 50.06 cents a pound on the Chicago Board of Trade. Soybeans for delivery in May declined 0.6 percent to $13.8475 a bushel.
Refined palm oil for September delivery fell 1.3 percent to 6,310 yuan ($1,018) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month retreated 1.4 percent to 7,862 yuan a ton.
The contract for June delivery advanced as much as 0.3 percent to 2,379 ringgit ($784) a metric ton on the Bursa Malaysia Derivatives exchange, and ended the morning session at 2,377 ringgit in Kuala Lumpur. Futures have lost 34 percent in the past year.
Inventories shrank 11 percent to 2.17 million tons in March from 2.44 million tons in February, the steepest monthly drop since January 2011, the Malaysian Palm Oil Board said yesterday. Stockpiles may fall to 2.01 million tons by the end of this month, according to Sebastian Tobing, an analyst with UBS AG, while Kenanga Investment Bank Bhd. predicts a drop to 1.98 million tons.
“Demand from the northern hemisphere should improve month- on-month except for China, which may slow down its purchase after a strong pick-up last month,” Alan Lim Seong Chun, an analyst at Kenanga, wrote in a report today. “We expect crude palm oil prices to recover in the second quarter to 2,800 ringgit a ton as we expect a sustained decline in the inventory level to 1.82 million tons by June.”
Output climbed 2.2 percent to 1.33 million tons in March, while exports increased 10 percent to 1.54 million tons, the board said yesterday. Shipments to China jumped 77 percent to 418,059 tons in March from a month earlier, board data shows.
Exports from Malaysia climbed 3.5 percent to 456,440 tons in the first 10 days of April from the same period in March, Intertek said yesterday. Exports gained 5.4 percent to 462,276 tons, said Societe Generale de Surveillance.
Soybean oil for July delivery lost 0.3 percent to 50.06 cents a pound on the Chicago Board of Trade. Soybeans for delivery in May declined 0.6 percent to $13.8475 a bushel.
Refined palm oil for September delivery fell 1.3 percent to 6,310 yuan ($1,018) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month retreated 1.4 percent to 7,862 yuan a ton.