Palm declined for a second day, falling to the lowest level in more than a week, on concern that the advancing soybean harvest in Brazil will boost global oilseed supplies, depressing demand for the tropical oil.
The contract for May delivery lost as much as 1.5 percent to 2,375 ringgit ($765) a metric ton on the Malaysia Derivatives Exchange, the lowest most-active price since March 4, and traded at 2,390 ringgit before the midday break. Futures have lost 29 percent in the past year as supplies outpaced demand.
About 48 percent of Brazil’s soybean crop was harvested as of March 8, compared with 46 percent a year earlier, according to researcher Safras & Mercado. The country is set to overtake the U.S. this year as the top exporter of the beans that can be crushed to make soybean oil.
“Supplies will be ample in the market for both soybeans and palm oil” from May onwards, Chandran Sinnasamy, head of trading at LT International Futures Sdn., said by phone from Kuala Lumpur. “High stock levels in China” are also a concern.
Stockpiles of imported palm oil at ports tracked by Grain.gov.cn climbed to a record 1.28 million tons, up 70,000 tons from a week earlier, the state-owned researcher said March 8. Exports from Malaysia, the second-largest producer, fell 14 percent to 1.4 million tons in February for a fourth monthly drop, according to the nation’s palm oil board.
About 10.5 million tons of soybeans and products made from the oilseed are scheduled for shipment on vessels berthed, arrived or expected at major ports in Brazil as of March 12, up from 10.27 million tons a week earlier, SA Commodities and Unimar Agenciamentos Maritimos said yesterday.
Soybean oil for May delivery declined 0.4 percent to 49.76 cents a pound on the Chicago Board of Trade. Soybeans for May delivery was little changed at $14.6675 a bushel. Soybean oil was about 1.42 times costlier than palm oil.
Refined palm oil for delivery in September dropped as much as 2.1 percent to 6,374 yuan ($1,025) a ton on the Dalian Commodity Exchange, the lowest price for the most-active contract since July 2010. Soybean oil for delivery in the same month declined 1 percent to 8,074 yuan a ton.
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