BLBG:Palm Oil Trims Losses as Stockpiles Advance Less Than Expected
Palm oil trimmed losses, after dropping to the lowest level in three years, as stockpiles in Malaysia, the largest producer after Indonesia, climbed less than expected in October.
The contract for January delivery traded 0.8 percent lower at 2,297 ringgit ($750) a metric ton at 3:19 p.m. on the Malaysia Derivatives Exchange. Futures earlier slumped 4.2 percent to 2,220 ringgit, the lowest price for the most-active contract since November 2009. The price retreated 7.2 percent last week, the most since the five days ended Sept. 28.
While reserves rose 1.1 percent to a record 2.51 million tons from the previous month, according to Palm Oil Board data, they were less than the median estimate of 2.7 million tons in a Bloomberg survey. Output fell 3.3 percent to 1.94 million tons from a record of 2 million tons in September, the board said. Exports surged 16 percent to 1.76 million tons.
“Given that November, December output should drop, we think that prices have pretty much bottomed out already,” said Ben Santoso, an analyst at DBS Group Holdings Ltd. in Singapore.
Palm oil earlier fell as the U.S. government raised its forecast for soybean production, easing concern that global cooking oil supply will decline.
The U.S. soybean harvest will total 2.971 billion bushels (80.86 million tons), up 3.9 percent from 2.86 billion estimated in October, the U.S. Department of Agriculture said Nov. 9 in its fourth survey-based forecast for this year’s crop. The average estimate of 29 analysts surveyed by Bloomberg was 2.892 billion bushels, and U.S. farmers harvested 3.094 billion bushels last year. Soybeans are crushed to make oil which competes with palm for use in food and fuel.
Soybeans Decline
Soybean oil for December delivery slid as much as 2.6 percent to 46.52 cents a pound on the Chicago Board of Trade, the lowest level for the most-active contract since October 2010. Soybeans for January declined as much as 2.1 percent to $14.2125 a bushel, the cheapest price for the most active contract since June, before trading at $14.2675.
Palm oil for May delivery lost 2.3 percent to close at 6,554 yuan ($1,052) a ton on the Dalian Commodity Exchange, the lowest closing level for the most active contract since July 2010. In intraday trading, futures fell by the maximum daily limit of 4 percent from the previous settlement.
Soybean oil for the same month fell 3.1 percent to end at 8,348 yuan a ton, the lowest price since September 2010. The contract also fell earlier by the daily limit of 4 percent.
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
