MARKET DEVELOPMENT
Palm Swings Near 3-Week High After First Annual Gain Since 2010
Palm Swings Near 3-Week High After First Annual Gain Since 2010
03/01/2014 (Bloomberg) - Palm oil swung near the highest level in more than three weeks, after capping its first annual gain in three years, amid speculation that inventories in Malaysia probably dropped in December for the first time in four months.
The contract for March delivery advanced 0.4 percent to 2,669 ringgit ($813) a metric ton on the Bursa Malaysia Derivatives, the highest level for most-active futures since Dec. 9, before declining to 2,649 ringgit by the midday break. Prices settled at 2,659 ringgit on Dec. 31, capping a 9.1 percent annual increase.
“We are bullish on palm oil prices because we think production should decline 10 percent in December while exports only dropped 3 percent,” said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd. “This should lead to the first decline in inventory levels in four months.”
Stockpiles in Malaysia, the second-largest producer, gained 7.2 percent to 1.98 million tons in November from a month earlier, according to the Malaysian Palm Oil Board. While that was the third straight monthly increase, reserves were 23 percent lower than a year earlier, showed data from the MPOB, which is scheduled to release figures for December on Jan. 10.
Exports dropped 3.3 percent to 1.42 million tons last month from November, SGS (Malaysia) Sdn. said on Dec. 31. Production is typically lowest in January and February because of growing cycles, while exports decrease during the Northern Hemisphere winter as the tropical oil clouds in cooler temperatures.
Soybean oil for March delivery rose 0.4 percent to 39.13 cents a pound on the Chicago Board of Trade on Dec. 31. Soybeans fell 1.2 percent to $12.925 a bushel.
Refined palm oil for May delivery gained 1.4 percent to 6,124 yuan ($1,012) a ton on the Dalian Commodity Exchange. Soybean oil climbed 0.8 percent to 6,904 yuan.
The contract for March delivery advanced 0.4 percent to 2,669 ringgit ($813) a metric ton on the Bursa Malaysia Derivatives, the highest level for most-active futures since Dec. 9, before declining to 2,649 ringgit by the midday break. Prices settled at 2,659 ringgit on Dec. 31, capping a 9.1 percent annual increase.
“We are bullish on palm oil prices because we think production should decline 10 percent in December while exports only dropped 3 percent,” said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd. “This should lead to the first decline in inventory levels in four months.”
Stockpiles in Malaysia, the second-largest producer, gained 7.2 percent to 1.98 million tons in November from a month earlier, according to the Malaysian Palm Oil Board. While that was the third straight monthly increase, reserves were 23 percent lower than a year earlier, showed data from the MPOB, which is scheduled to release figures for December on Jan. 10.
Exports dropped 3.3 percent to 1.42 million tons last month from November, SGS (Malaysia) Sdn. said on Dec. 31. Production is typically lowest in January and February because of growing cycles, while exports decrease during the Northern Hemisphere winter as the tropical oil clouds in cooler temperatures.
Soybean oil for March delivery rose 0.4 percent to 39.13 cents a pound on the Chicago Board of Trade on Dec. 31. Soybeans fell 1.2 percent to $12.925 a bushel.
Refined palm oil for May delivery gained 1.4 percent to 6,124 yuan ($1,012) a ton on the Dalian Commodity Exchange. Soybean oil climbed 0.8 percent to 6,904 yuan.