MARKET DEVELOPMENT
Palm Oil Swings Near 14-Month High as Malaysian Output May Drop
Palm Oil Swings Near 14-Month High as Malaysian Output May Drop
09/12/2013 (Bloomberg) - Palm oil fluctuated near a 14-month high on speculation that heavy rain would cut production in Malaysia, the world’s largest supplier after Indonesia.
The contract for February delivery gained and lost at least 0.3 percent before ending the morning session unchanged at 2,670 ringgit ($829) a metric ton on the Bursa Malaysia Derivatives. The close on Dec. 6 was the highest since Sept. 21, 2012. Prices rose for a fourth week in the five days to Dec. 6.
Palm entered a bull market last month on speculation that production in Indonesia may drop for the first time since 1998. Output in Malaysia probably fell 10.6 percent in November from a month earlier, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari Sdn. in Selangor, citing estimates from planters. The Meteorological Department forecasts isolated thunderstorms through Dec. 15 in Sabah, Sarawak and Johor, Malaysia’s biggest producing states.
“The drop in production was likely due to weather vagaries and a seasonal trend,” said Paramalingam. “Futures are widely expected to breach the 2,700 ringgit mark this month.” The trees are entering the low-production cycle.
The Malaysian Palm Oil Board is scheduled to release its data tomorrow. Output may have dropped 2.6 percent to 1.92 million tons, according to a Bloomberg survey. Stockpiles probably jumped 6.2 percent to 1.96 million tons, the highest level since March and exports dropped 5.4 percent to 1.57 million tons, the survey showed.
Indonesian output will decline by 500,000 tons to 27.5 million tons this year, before rebounding to 30.5 million tons in 2014, Dorab Mistry, director at Godrej International Ltd., told a conference in Bandung, Indonesia, on Nov. 29.
Soybean oil for January delivery advanced 0.4 percent to 40.65 cents a pound on the Chicago Board of Trade. Soybeans climbed 0.5 percent to $13.3225 a bushel.
Refined palm oil for May delivery rose 1.3 percent to 6,262 yuan ($1,030) a ton on the Dalian Commodity Exchange. Soybean oil was little changed at 7,236 yuan.
The contract for February delivery gained and lost at least 0.3 percent before ending the morning session unchanged at 2,670 ringgit ($829) a metric ton on the Bursa Malaysia Derivatives. The close on Dec. 6 was the highest since Sept. 21, 2012. Prices rose for a fourth week in the five days to Dec. 6.
Palm entered a bull market last month on speculation that production in Indonesia may drop for the first time since 1998. Output in Malaysia probably fell 10.6 percent in November from a month earlier, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari Sdn. in Selangor, citing estimates from planters. The Meteorological Department forecasts isolated thunderstorms through Dec. 15 in Sabah, Sarawak and Johor, Malaysia’s biggest producing states.
“The drop in production was likely due to weather vagaries and a seasonal trend,” said Paramalingam. “Futures are widely expected to breach the 2,700 ringgit mark this month.” The trees are entering the low-production cycle.
The Malaysian Palm Oil Board is scheduled to release its data tomorrow. Output may have dropped 2.6 percent to 1.92 million tons, according to a Bloomberg survey. Stockpiles probably jumped 6.2 percent to 1.96 million tons, the highest level since March and exports dropped 5.4 percent to 1.57 million tons, the survey showed.
Indonesian output will decline by 500,000 tons to 27.5 million tons this year, before rebounding to 30.5 million tons in 2014, Dorab Mistry, director at Godrej International Ltd., told a conference in Bandung, Indonesia, on Nov. 29.
Soybean oil for January delivery advanced 0.4 percent to 40.65 cents a pound on the Chicago Board of Trade. Soybeans climbed 0.5 percent to $13.3225 a bushel.
Refined palm oil for May delivery rose 1.3 percent to 6,262 yuan ($1,030) a ton on the Dalian Commodity Exchange. Soybean oil was little changed at 7,236 yuan.