MARKET DEVELOPMENT
Palm Heads for Longest Losing Run Since March on Cheaper Soyoil
Palm Heads for Longest Losing Run Since March on Cheaper Soyoil
09/01/2014 (Bloomberg) - Palm oil fell for a sixth day in the longest losing streak since March on speculation that declining prices of soybean oil, an alternative in food and fuel uses, will cut demand for the tropical oil.
Futures for March delivery lost as much as 1.2 percent to 2,517 ringgit ($769) a metric ton on the Bursa Malaysia Derivatives, the lowest level since Nov. 12. The price was at 2,526 ringgit by 3:08 p.m. in Kuala Lumpur, falling 5 percent this year.
Global inventories of soybeans, crushed to make the oil, may be 71.46 million tons, more than the 70.62 million tons estimated by the U.S. Department of Agriculture in December, according to a Bloomberg survey. Soybean oil tumbled to the lowest level since July 2010 yesterday in Chicago, reducing its premium to palm oil.
“Palm has to fall more, so that its discount expands,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental Singapore Pte. A decline to about 2,500 ringgit may attract some buyers, he said.
Soybean oil for March delivery rose to 37.79 cents a pound on the Chicago Board of Trade, after touching 37.42 cents yesterday. Its premium over palm was at $64.06 a ton today, compared with an average of $237.77 in the past year and an almost two-year low of $47.25 on Jan. 3, data compiled by Bloomberg show. Soybeans were up 0.3 percent at $12.73 a bushel.
Refined palm oil for May delivery gained 0.5 percent to close at 5,812 yuan ($960) a ton on the Dalian Commodity Exchange, after ending yesterday at the lowest level for futures since Oct. 15. Soybean oil gained 0.4 percent to 6,636 yuan, recovering from the lowest close since April 2009 yesterday.
Futures for March delivery lost as much as 1.2 percent to 2,517 ringgit ($769) a metric ton on the Bursa Malaysia Derivatives, the lowest level since Nov. 12. The price was at 2,526 ringgit by 3:08 p.m. in Kuala Lumpur, falling 5 percent this year.
Global inventories of soybeans, crushed to make the oil, may be 71.46 million tons, more than the 70.62 million tons estimated by the U.S. Department of Agriculture in December, according to a Bloomberg survey. Soybean oil tumbled to the lowest level since July 2010 yesterday in Chicago, reducing its premium to palm oil.
“Palm has to fall more, so that its discount expands,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental Singapore Pte. A decline to about 2,500 ringgit may attract some buyers, he said.
Soybean oil for March delivery rose to 37.79 cents a pound on the Chicago Board of Trade, after touching 37.42 cents yesterday. Its premium over palm was at $64.06 a ton today, compared with an average of $237.77 in the past year and an almost two-year low of $47.25 on Jan. 3, data compiled by Bloomberg show. Soybeans were up 0.3 percent at $12.73 a bushel.
Refined palm oil for May delivery gained 0.5 percent to close at 5,812 yuan ($960) a ton on the Dalian Commodity Exchange, after ending yesterday at the lowest level for futures since Oct. 15. Soybean oil gained 0.4 percent to 6,636 yuan, recovering from the lowest close since April 2009 yesterday.