Palm Oil Drops for Second Day as Malaysian Stockpiles Increase
Palm oil fell for a second day on concern that inventories in Malaysia, the world’s second-largest producer, may advance to an 11-month high because of a seasonal increase in output.
The November-delivery contract fell as much as 0.8 percent to 3,035 ringgit ($975) a metric ton on the Malaysia Derivatives Exchange and ended the morning session at 3,041 ringgit Kuala Lumpur. Futures have lost 4.2 percent this year.
Stockpiles probably rose 7 percent to 2.14 million tons in August from 2 million tons in July, according to the median in the Bloomberg survey of two analysts and three plantation companies. That would be the highest level since September last year. Output climbed 0.5 percent to 1.7 million tons on-month, while exports rose 9.5 percent to 1.42 million tons, the survey showed. The Palm Oil Board releases the data on Sept. 10.
“The market is lower because of supply pressure from Malaysia and Indonesia as production is generally higher in September,” Vijay Mehta, a director at Commodity Links Pte., said by phone from Singapore. “Prices should remain around the current levels for demand to continue to come up and the supply pressure to ease.”
November-delivery soybeans dropped as much as 0.3 percent to $17.6225 a bushel on the Chicago Board of Trade, after rising to an all-time high of $17.89 yesterday. Soybean oil for December delivery slid as much as 0.6 percent to 57.90 cents a pound. Palm oil and soybean oil are used in foods and fuels.
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