BLBG:Palm Oil Drops as South American Soybean Crop Prospects Improve
Palm oil fell, trimming a weekly advance, as forecasts for improving soybean crop conditions in South America cut concern global oilseed supply will dwindle.
The contract for January delivery dropped as much as 2.1 percent to 2,384 ringgit ($776) a metric ton on the Malaysia Derivatives Exchange. Futures traded at 2,388 ringgit by the midday break, heading for a 3.1 percent increase this week. The bourse was closed for a holiday yesterday.
More normal rain in the Brazilian regions of Mato Grosso, Goias, Minas Gerais and western Bahia will favor soybean planting and development hurt by hot, dry weather, Telvent DTN Inc. said in a report yesterday. Combined corn and soybean output in Brazil and Argentina will rise to a record next year, the U.S. Department of Agriculture said on Nov. 9.
“The previous concern was that Brazil was too dry,” Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said by phone in Kuala Lumpur. “The arrival of the rain has improved the prospects of soybean oil production globally.”
Exports from Malaysia, the largest producer after Indonesia, were little changed at 769,087 tons in the first 15 days of November from 769,534 tons in the same period in October, Intertek said today.
Soybean oil for January delivery fell 0.2 percent to 47.70 cents a pound on the Chicago Board of Trade, extending yesterday’s 0.5 percent decline for the most-active contract. Soybeans for January lost 0.3 percent to $13.9825 a bushel. Soybean oil and palm are used in food and fuel.
Palm oil for May delivery fell 0.5 percent to 6,718 yuan ($1,078) a ton on the Dalian Commodity Exchange. Soybean oil for the same month was little changed at 8,418 yuan a ton.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
