MARKET DEVELOPMENT
Palm Gains for Second Day on Speculation Production Will Decline
Palm Gains for Second Day on Speculation Production Will Decline
17/12/2013 (Bloomberg) - Palm oil advanced on speculation that output will decline in Malaysia, the world’s second-largest producer, reducing stockpiles.
The contract for delivery in March climbed as much as 0.6 percent to 2,596 ringgit ($801) a metric ton on the Bursa Malaysia Derivatives before trading at 2,592 ringgit at the midday break. Futures rose 0.7 percent yesterday for the first gain in six days.
Production fell 5.6 percent to 1.86 million tons in November from a month earlier and exports dropped 8.7 percent to 1.52 million tons, boosting stockpiles to 1.98 million tons, according to the Malaysian Palm Oil Board. While inventories gained 7.2 percent from October, they were 23 percent lower than the 2.57 million tons in November 2012, board data show.
“The market is in a consolidation mode ahead of the year end,” Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd., said by phone from Kuala Lumpur. “Production looks like that it’s going to be flat to lower compared to last month.”
A seasonal decline in production means reserves will stay below 2 million tons through the end of 2013 and drop further in the first quarter, Rabobank International estimates. Output is typically highest from July to October because of growing cycles and tapers off from November with January and February usually recording the lowest production.
Soybean oil for March delivery was little changed at 40.11 cents a pound on the Chicago Board of Trade. Soybeans were little changed at $13.25 a bushel.
Refined palm oil for May delivery climbed 0.8 percent to 6,084 yuan ($1,002) a ton on the Dalian Commodity Exchange. Soybean oil advanced 0.5 percent to 7,038 yuan.
The contract for delivery in March climbed as much as 0.6 percent to 2,596 ringgit ($801) a metric ton on the Bursa Malaysia Derivatives before trading at 2,592 ringgit at the midday break. Futures rose 0.7 percent yesterday for the first gain in six days.
Production fell 5.6 percent to 1.86 million tons in November from a month earlier and exports dropped 8.7 percent to 1.52 million tons, boosting stockpiles to 1.98 million tons, according to the Malaysian Palm Oil Board. While inventories gained 7.2 percent from October, they were 23 percent lower than the 2.57 million tons in November 2012, board data show.
“The market is in a consolidation mode ahead of the year end,” Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd., said by phone from Kuala Lumpur. “Production looks like that it’s going to be flat to lower compared to last month.”
A seasonal decline in production means reserves will stay below 2 million tons through the end of 2013 and drop further in the first quarter, Rabobank International estimates. Output is typically highest from July to October because of growing cycles and tapers off from November with January and February usually recording the lowest production.
Soybean oil for March delivery was little changed at 40.11 cents a pound on the Chicago Board of Trade. Soybeans were little changed at $13.25 a bushel.
Refined palm oil for May delivery climbed 0.8 percent to 6,084 yuan ($1,002) a ton on the Dalian Commodity Exchange. Soybean oil advanced 0.5 percent to 7,038 yuan.