MARKET DEVELOPMENT
Palm Drops on Concern Record U.S. Soybean Crop to Boost Supplies
Palm Drops on Concern Record U.S. Soybean Crop to Boost Supplies
02/08/2013 (Bloomberg) - Palm oil declined on speculation that a record soybean crop in the U.S. will add to global oilseed supplies, reducing demand for the tropical oil.
The contract for delivery in October lost as much as 0.6 percent to 2,222 ringgit ($686) a metric ton on the Bursa Malaysia Derivatives, and was at 2,231 ringgit by the close of the morning trade in Kuala Lumpur. Futures dropped 4.6 percent last month, the most since February, after reaching the lowest level since October 2009 on July 26.
The U.S. soybean harvest will climb 13 percent to 93.1 million tons, bringing global production to 285.9 million tons in 2013-2014 from 268 million tons a year earlier, according to the U.S. Department of Agriculture. Palm oil output, accounting for 35 percent of world cooking-oil supply, will expand 5 percent to 58.1 million tons, the USDA estimates.
“This negativity across all oilseeds still continues because there are hopes of high production when it comes to soybeans in the U.S.,” said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. “That will probably reduce demand for palm.”
Palm oil shipments from Malaysia gained 5.3 percent to 1.39 million tons, according to SGS (Malaysia) Sdn. This compares with a 24 percent drop in the first half of the month and a 6 percent decline in the first 25 days of July, SGS estimates show.
Expectations of lower production in the first half of August due to the Eid festival holidays may support prices, said Chandran Sinnasamy, head of trading at LT International Futures Sdn. in Kuala Lumpur. Indonesian markets are closed the whole of next week, while Malaysia will be closed on Aug. 8 and 9. Indonesia and Malaysia are the biggest palm oil producers.
Soybean oil for delivery in December advanced 0.2 percent to 42.80 cents a pound on the Chicago Board of Trade. Soybeans for November were little changed at $12.07 a bushel, after touching $11.9425 yesterday, the lowest intraday price for a most-active contract since Jan. 31, 2012.
Refined palm oil for January delivery were little changed at 5,422 yuan ($885) a ton on the Dalian Commodity Exchange, while soybean oil lost 0.2 percent to 7,014 yuan.
The contract for delivery in October lost as much as 0.6 percent to 2,222 ringgit ($686) a metric ton on the Bursa Malaysia Derivatives, and was at 2,231 ringgit by the close of the morning trade in Kuala Lumpur. Futures dropped 4.6 percent last month, the most since February, after reaching the lowest level since October 2009 on July 26.
The U.S. soybean harvest will climb 13 percent to 93.1 million tons, bringing global production to 285.9 million tons in 2013-2014 from 268 million tons a year earlier, according to the U.S. Department of Agriculture. Palm oil output, accounting for 35 percent of world cooking-oil supply, will expand 5 percent to 58.1 million tons, the USDA estimates.
“This negativity across all oilseeds still continues because there are hopes of high production when it comes to soybeans in the U.S.,” said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. “That will probably reduce demand for palm.”
Palm oil shipments from Malaysia gained 5.3 percent to 1.39 million tons, according to SGS (Malaysia) Sdn. This compares with a 24 percent drop in the first half of the month and a 6 percent decline in the first 25 days of July, SGS estimates show.
Expectations of lower production in the first half of August due to the Eid festival holidays may support prices, said Chandran Sinnasamy, head of trading at LT International Futures Sdn. in Kuala Lumpur. Indonesian markets are closed the whole of next week, while Malaysia will be closed on Aug. 8 and 9. Indonesia and Malaysia are the biggest palm oil producers.
Soybean oil for delivery in December advanced 0.2 percent to 42.80 cents a pound on the Chicago Board of Trade. Soybeans for November were little changed at $12.07 a bushel, after touching $11.9425 yesterday, the lowest intraday price for a most-active contract since Jan. 31, 2012.
Refined palm oil for January delivery were little changed at 5,422 yuan ($885) a ton on the Dalian Commodity Exchange, while soybean oil lost 0.2 percent to 7,014 yuan.