BLBG: Palm Oil Drops for First Time in Four Days on Inventory Concern
By Thomas Kutty Abraham
Sept. 7 (Bloomberg) -- Palm oil dropped for the first time in four days on concern that a decline in exports from Malaysia, the second-biggest grower, may swell stockpiles before a seasonal increase in output.
The November-delivery contract fell as much as 0.5 percent to 2,608 ringgit ($834) a metric ton on the Malaysia Derivatives Exchange and ended the morning session at 2,620 ringgit. Futures jumped by the most in almost a month yesterday on speculation that supplies of U.S. soybeans may be lower than expected.
“There have been concerns about stockpiles increasing for weeks and with the production entering the peak season, it is negative for the market,” said Ryan Long, a dealer at OSK Investment Bank Bhd. in Kuala Lumpur. “There’s also a bit of profit-taking after yesterday’s big jump.”
Palm oil stockpiles in Malaysia may increase for the first time in August after exports declined, Ryan said. Shipments from Malaysia slumped 17.8 percent last month, cargo surveyor Societe Generale de Surveillance said Sept. 1. Shipments declined 13.6 percent, rival Intertek said.
The Malaysian Palm Oil Board will release the inventory and production data for August on Sept. 15.
December-delivery soybean oil rose as much as 0.4 percent to 41.04 cents a pound, widening the premium over palm oil to $64.16 a ton from $59.68 yesterday, according to Bloomberg data. Soybeans for November delivery added as much as 0.4 percent to $10.395 a bushel on the Chicago Board of Trade. Exchanges in the U.S. were closed for Labor Day holiday yesterday.
On the Dalian Commodity Exchange, palm oil for delivery in May climbed as much as 0.6 percent to 7,384 yuan ($1,088) a ton, while May-delivery soybean oil added as much as 0.4 percent to 8,218 yuan a ton.
CME Group Inc.’s December-delivery palm oil contract, which is pegged to the Malaysian benchmark, climbed as much as 1.5 percent to $835 a ton, the highest intraday level in more than two weeks.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net
