Palm Drops as Good Weather for Soybeans May Boost Oilseed Supply
Kamis, 25 Juli 2013 | 09:52
Palm oil declined to the lowest level in a week as forecasts for cool, wet weather improved prospects for US soybean crops, boosting global supplies of oilseeds and the cooking oils crushed from them.The contract for delivery in October fell as much as 1 percent to 2,236 ringgit ($703) a metric ton on the Bursa Malaysia Derivatives, the lowest price since July 17. Futures were at 2,242 ringgit at the close of the morning session in Kuala Lumpur. Palm for local physical delivery in August was at 2,320 ringgit, data compiled by Bloomberg show.
The lack of any significant hot weather for the US Midwest during the next 10 days will favor reproductive soybeans, DTN said in a report yesterday. Accuweather.com forecast light to moderate rainfall in parts of the region. Global supplies of vegetable oils are set to expand in 2013-2014 starting Oct. 1 as palm oil output climbs to a record and production from soybeans and sunflower seed jumps, Oil World said July 16.
“If the good weather continues, it will lead to bumper crops” in the US, said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd. “This will produce more soybean oil and pressure prices.”
World production of soybean oil may total 44.03 million tons in 2013-2014, up from 42.27 million tons a year earlier, as U.S. soybean crops recover from last year’s drought, Oil World said. Output of palm oil, the most used oil for cooking and in biodiesel, may rise 4.4 percent to a record 58.2 million tons amid higher supplies from top growers Indonesia and Malaysia.
Soybean oil’s premium over palm oil was at $284 a ton today, compared with an average of about $305 in the three months ended June 30, according to data compiled by Bloomberg.
Soybean oil for delivery in December gained 0.4 percent to 44.87 cents a pound on the Chicago Board of Trade after closing yesterday at the lowest level since October 2010. Soybeans for delivery in November climbed 0.5 percent to $12.6675 a bushel.
Refined palm oil for January delivery lost 1.3 percent to 5,560 yuan ($906) a ton on the Dalian Commodity Exchange. Soybean oil fell 1 percent to 7,238 yuan.
By Ranjeetha Pakiam