Palm Oil Futures Drop to One-Month Low After Malaysian Exports Decline
Author: Admin | Filed under: Palm Oil Futures NewsBy Thomas Kutty Abraham
Bloomberg
25 August, 2010
Palm oil declined to the lowest level in a month on concern that inventory in Malaysia, the second-biggest grower, may climb as exports fall.
The November-delivery contract declined as much as 0.5 percent to 2,497 ringgit ($796) a metric ton on the Malaysia Derivatives Exchange, the lowest intraday level since July 30. Futures, down 8.4 percent from a 15-month high close on Aug. 9, ended the morning session at 2,501 ringgit.
“Exports don’t look promising and that may have some impact on the stockpiles,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. “External markets and a weaker crude oil are also not supportive for the market.”
Malaysia’s palm oil exports fell 7.6 percent to 992,319 tons in the Aug. 1-25 period, compared with 1,074,329 tons in the same period in July, cargo surveyor Intertek said today. Rival Societe Generale de Surveillance said shipments dropped 14.9 percent in the period to 939,456 tons.
“We don’t see the potential for supply or demand shocks in the coming 12 months as stock levels in Malaysia are not threateningly low and demand has not been supernormal,” ECM Libra Capital Sdn. said in a report today. “The soybean market looks likely to be flushed with a record crop from North America by year end. This will keep soybean prices bearish into 2011.”
The soybean crop will total 3.5 billion bushels, topping the U.S. Department of Agriculture’s forecast of 3.43 billion, according to the Professional Farmers of America newsletter last week. Soybeans have slipped 4.8 percent since reaching $10.49 a bushel on Aug. 5, the highest level in almost seven months.
The November-delivery contract, which fell 0.7 percent to $9.99 a bushel yesterday, traded at $10.0250 on the Chicago Board of Trade at 12:12 p.m. in Singapore. December-delivery soybean oil traded little changed at 40.05 cents a pound.
CME Group Inc.’s December-delivery palm oil contract, which is pegged to the Malaysian benchmark, tumbled as much as 1.5 percent to $790.75 a ton. On the Dalian Commodity Exchange, palm oil for delivery in May dropped as much as 0.6 percent to 7,112 yuan ($1,046) a ton, while May-delivery soybean oil jumped as much as 1 percent to 8,014 yuan a ton.
