Palm oil fell to the lowest level in more than a week on speculation that stockpiles in Malaysia, the second-largest grower, may increase amid a seasonal jump in production and drop in exports.
The October-delivery contract dropped 0.4 percent to close at 2,907 ringgit ($938) a metric ton on the Malaysia Derivatives Exchange, the lowest settlement price since July 26. Futures have dropped 8.4 percent this year.
Stockpiles gained 10 percent to 1.87 million tons in July from 1.7 million tons in June, according to the median in a Bloomberg survey of four analysts and one plantation company. Exports declined 9.8 percent to 1.38 million tons, while output rose 9.5 percent to 1.61 million tons, the survey showed. The Malaysian Palm Oil Board releases the data on Aug. 10.
“Palm oil fell on concerns that higher production in the high output months may lead to a build-up of stockpiles amid tepid demand,” said Paramalingam Supramaniam, a director at Pelindung Bestari Sdn. “End-buyers have lots of oil in their pipeline. There’s no rush to stockpile as they foresee lower prices in the near future.”
Soybean oil for December delivery advanced 0.9 percent to 52.78 cents per pound on the Chicago Board of Trade. Soybeans for November delivery rose 1 percent to $15.995 a bushel. Palm oil and soybean oil are used in foods and fuels.
Palm oil for January delivery gained 0.5 percent to close at 7,826 yuan ($1,229) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month climbed 0.9 percent to end at 9,612 yuan a ton.
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