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Palm Oil Ends Five-Day Rally Before Malaysia Holiday, Paring Weekly Gain
Palm oil dropped for the first time in six days after some investors sold ahead of a long weekend.
November-delivery futures fell 1.1 percent to 2,644 ringgit ($850) a metric ton, the most in more than a week, paring the weekly advance to 2.9 percent. Prices advanced 5.5 percent in five days through yesterday amid speculation China, the biggest vegetable oil consumer, may boost soybean and palm oil imports.
“There’s bound to be profit-taking after such a sharp rally, particularly ahead of a long weekend,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. “There’s a lot of trade data due before trading resumes next week, and people want to pare positions.”
Palm oil futures traded only the morning session today and the market is closed tomorrow for the Muslim Eid holiday. Cargo surveyors will publish export numbers for the first 10 days of this month this week, and the Malaysian Palm Oil Board is set to release the inventory and output data for August on Sept. 15.
Shipments from Malaysia rose 1.15 percent to 396,684 tons in the nine days of this month, compared with 392,185 tons in the first 10 days of August, surveyor Intertek said today.
“There is speculation inventory in Malaysia may have risen in August because of lower exports and production is also picking up,” CIMB’s Ng said.
Exports from Malaysia slumped 17.8 percent in August, cargo surveyor Societe Generale de Surveillance said on Sept. 1. Sales fell 13.6 percent, rival Intertek said. An increase in inventory last month would be the first monthly gain this year.
Palm oil has advanced 17 percent from near an eight-month low on July 7, driven by festival demand in Asia, and rally in soybeans on speculation output in the U.S., the biggest grower and exporter, may trail previous forecasts.
U.S. Crops
The U.S. Department of Agriculture is scheduled to publish a report on crops Sept. 10. The soybean crop may be 3.37 billion bushels, 1.8 percent less than the USDA’s forecast of 3.433 billion, Allendale Inc. said Sept. 3, citing a survey.
Pakistan, the third-biggest importer of palm oil, may buy 10 percent less in October and November than in July after the country’s worst-ever floods destroyed villages, Ikram Chaudhary, secretary of the Pakistan Edible Oil Refiners Association, in a phone interview from Islamabad. Purchases in July were 147,666 tons, according to the country’s Federal Bureau of Statistics.
December-delivery soybean oil fell as much as 1.8 percent to 40.94 cents a pound on the Chicago Board of Trade, narrowing the vegetable oil’s premium over palm oil to $57.58 a ton from $59.35 yesterday, according to Bloomberg data.
Soybeans for November delivery lost as much as 1.4 percent to $10.3375 a bushel on the Chicago Board of Trade.
On the Dalian Commodity Exchange, palm oil for delivery in May slumped as much as 4.4 percent to 7,068 yuan ($1,041) a ton, before rebounding to 7,280 yuan at 1:34 p.m. in Singapore. May- delivery soybean oil lost as much as 3.6 percent to 7,938 yuan.
Commodity prices in China declined today on speculation that regulators were investigating large positions in natural rubber futures, the Securities Times said on its website, citing people it didn’t identify. An official at the China Securities Regulatory Commission, who didn’t wish to be identified, declined to comment.
CME Group Inc.’s December-delivery palm oil contract, which is pegged to the Malaysian benchmark, declined as much as 0.9 percent to $842 a ton.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net
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