Palm Oil Climbs Amid Speculation Soybean Crop May Miss Target
Author: Admin | Filed under: Palm Oil Prices NewsBy Thomas Kutty Abraham
Sept. 6 (Bloomberg) — Palm oil futures jumped by the most in more than three weeks amid speculation that supplies of U.S. soybeans, which can be crushed to make a substitute oil, may be lower than expected.
The November-delivery contract surged as much as 2.2 percent to 2,626 ringgit ($844) a metric ton on the Malaysia Derivatives Exchange, the biggest intraday gain since Aug. 13, and was at 2,614 ringgit at the 12:30 p.m. break in Kuala Lumpur. Futures gained 1.1 percent last week, the first weekly advance in three.
“There are some concerns the U.S. soybean crop may be lower than expected, and that’s going to act as a catalyst for palm oil,” said Arhnue Tan, an analyst at ECM Libra Capital Sdn. in Kuala Lumpur. The most-active contract traded at the highest level today since Aug. 18.
Soybean futures may rise on speculation that the U.S. Department of Agriculture will Sept. 10 cut its forecast for the crop because of bad weather in the Midwest, 24 of 33 traders and analysts surveyed from Chicago to Tokyo predicted on Sept. 3.
The U.S. soybean crop will be 3.37 billion bushels, 1.8 percent less than the USDA’s forecast of 3.433 billion, Allendale Inc., said on Sept. 3, citing a survey of farmers.
Soybeans for November delivery rose 2.6 percent to close at $10.35 a bushel on Sept. 3 on the Chicago Board of Trade, the biggest gain for a most-active contract since July 15. The U.S. markets are closed today for the Labor Day holiday.
Premium Widens
December-delivery soybean oil gained 1.6 percent to 40.86 cents a pound on Sept. 3, widening the vegetable oil’s premium over palm oil to $75.70 a ton that day from $73.58 a day earlier, according to Bloomberg data.
On the Dalian Commodity Exchange, May-delivery soybeans climbed as much as 1.3 percent to 4,087 yuan ($601) a ton, while soybean oil jumped as much as 1 percent to 8,224 yuan a ton. Palm oil for delivery in May advanced as much as 1.1 percent to 7,386 yuan a ton.
“Some concerns of dry weather in Latin America at a time when planting is about to begin is also helping soybeans and other oilseeds,” ECM Libra’s Tan said.
Still, palm oil may be pressured by the first monthly gain in stockpiles in a year in Malaysia, the second-biggest producer, after exports fell in August, she said. Exports from Malaysia slumped 17.8 percent in August, independent cargo surveyor Societe Generale de Surveillance said on Sept. 1. Shipments declined 13.6 percent, according to surveyor Intertek.
