MARKET DEVELOPMENT
Palm Oil Climbs to Three-Week High as U.S. Cuts Soybean Estimate
Palm Oil Climbs to Three-Week High as U.S. Cuts Soybean Estimate
14/08/2013 (Bloomberg) - Palm oil rallied to the highest level in more than three weeks after the U.S. cut its forecast for the soybean crop, more than analysts expected, spurring a rally in the oilseed that can be crushed to produce an alternative oil.
The contract for October delivery gained as much as 2.3 percent to 2,294 ringgit ($705) a metric ton on the Bursa Malaysia Derivatives, the highest price for most active futures since July 19, and ended the morning session at 2,282 ringgit. Palm oil for local physical delivery in August was at 2,310 ringgit yesterday, data compiled by Bloomberg show.
Farmers in the U.S., the world’s biggest soybeans producer and shipper, will harvest 3.26 billion bushels this year, down from 3.42 billion estimated last month and 3.357 billion forecast by analysts, after excessive rain in May and June reduced planted acreage and damaged yields, the U.S. Department of Agriculture said yesterday.
“Smaller soybean supplies will probably drive prices upwards given the correlation between soybean oil and palm oil,” said Arhnue Tan, an analyst with Alliance Investment Bank Bhd. in Kuala Lumpur. “On the demand side, there could be some switching if there is insufficient soybean oil supplies as palm oil is very cheap right now.”
Exports from Malaysia jumped 18 percent to 417,414 tons during in the first 10 days of this month from the same period in July, Intertek said yesterday. Palm is $252.54 a ton cheaper than soybean oil today, according to data compiled by Bloomberg.
Soybean oil for delivery in December advanced 1.2 percent to 43.27 cents a pound on the Chicago Board of Trade. Soybeans for November rose 0.7 percent to $12.3375 a bushel, extending a 3.6 percent gain yesterday.
Refined palm oil for January delivery climbed 2.9 percent to 5,570 yuan ($910) a ton on the Dalian Commodity Exchange. Soybean oil advanced 2.4 percent to 7,144 yuan a ton.
The contract for October delivery gained as much as 2.3 percent to 2,294 ringgit ($705) a metric ton on the Bursa Malaysia Derivatives, the highest price for most active futures since July 19, and ended the morning session at 2,282 ringgit. Palm oil for local physical delivery in August was at 2,310 ringgit yesterday, data compiled by Bloomberg show.
Farmers in the U.S., the world’s biggest soybeans producer and shipper, will harvest 3.26 billion bushels this year, down from 3.42 billion estimated last month and 3.357 billion forecast by analysts, after excessive rain in May and June reduced planted acreage and damaged yields, the U.S. Department of Agriculture said yesterday.
“Smaller soybean supplies will probably drive prices upwards given the correlation between soybean oil and palm oil,” said Arhnue Tan, an analyst with Alliance Investment Bank Bhd. in Kuala Lumpur. “On the demand side, there could be some switching if there is insufficient soybean oil supplies as palm oil is very cheap right now.”
Exports from Malaysia jumped 18 percent to 417,414 tons during in the first 10 days of this month from the same period in July, Intertek said yesterday. Palm is $252.54 a ton cheaper than soybean oil today, according to data compiled by Bloomberg.
Soybean oil for delivery in December advanced 1.2 percent to 43.27 cents a pound on the Chicago Board of Trade. Soybeans for November rose 0.7 percent to $12.3375 a bushel, extending a 3.6 percent gain yesterday.
Refined palm oil for January delivery climbed 2.9 percent to 5,570 yuan ($910) a ton on the Dalian Commodity Exchange. Soybean oil advanced 2.4 percent to 7,144 yuan a ton.