BLBG: Palm Oil Gains for the First Time in Three Days as Export Outlook Improves
Palm oil rose for the first time in three days on speculation an increase in exports from Malaysia, the second-biggest producer, may help pare stockpiles from the highest level in six months.
Futures for November delivery jumped as much as 0.9 percent to 2,638 ringgit ($849) a metric ton on the Malaysia Derivatives Exchange and closed the morning session at 2,632 ringgit. Prices are set for the first weekly drop in three weeks.
“There’s a bit of improvement in Malaysian exports and that may help bring down the stockpiles,” said Ryan Long, a dealer at OSK Investment Bank Bhd. in Kuala Lumpur. “There’s also some pre-weekend covering that’s helping the market,” he said, referring to closing out of short-positions, or bets that prices will decline.
Exports from Malaysia increased 5.4 percent in the first 15 days of September to 653,077 tons from the same period in August, Intertek said Sept. 15. Rival Societe Generale de Surveillance estimated the gain at 6.8 percent to 632,450.
Malaysia’s palm oil inventories climbed to 1,723,262 tons in August from 1,405,740 tons in July, the Malaysian Palm Oil Board said Sept. 15. That was the first advance since December, the board data show. Output rose 5.7 percent to 1,605,662 tons, while exports tumbled 18 percent to 1,211,326 tons, falling for the first time in four months.
Palm oil has rebounded 16 percent from an eight-month low on July 7 on speculation that demand will increase from Asian countries celebrating festivals and harvesting in Malaysia and Indonesia will be disrupted in November and December should La Nina cause flooding in growing areas.
Switch to Soyoil
The rally may have prompted some buyers to delay purchases and switch to soybean oil, Ivy Ng, an analyst at CIMB Investment Bank Bhd., said in a report today.
“The rise is partly justified by the poor weather,” she said. “We maintain our view that the price rally may not be sustained if weather conditions in key planting areas start to improve, as was the case in recent weeks.”
December-delivery soybean oil traded on the Chicago Board added as much as 1 percent to 42.18 cents a pound, the highest level in intraday trading in a month. November-delivery soybeans climbed as much as 1.2 percent to $10.49 a bushel.
On the Dalian Commodity Exchange, palm oil for delivery in May gained as much as 0.4 percent to 7,344 yuan ($1,092) a ton, while May-delivery soybean oil added as much as 0.4 percent to 8,174 yuan a ton.
CME Group Inc.’s December-delivery palm oil contract, which pegged to the Malaysian benchmark, climbed 0.2 percent to $839 a ton at 11:58 a.m. in Singapore.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net
