Palm Oil Jumps to One-Month High on Malaysian Production Outlook
Palm oil climbed for a fourth day to the highest level in a month on speculation that output in Malaysia, the world’s second-biggest producer, may have expanded last month at a slower pace than predicted by analysts.
The contract for delivery in December gained as much as 0.7 percent to 2,365 ringgit ($737) a metric ton on the Bursa Malaysia Derivatives, the highest price for the most-active contract since Sept. 11, and ended the morning session at 2,356 ringgit. Palm for physical delivery in October was at 2,350 ringgit yesterday, data compiled by Bloomberg show.
“There is some short covering ahead of the Malaysian Palm Oil Board data tomorrow as the market is estimating that production would not rise as much as expected earlier,” said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. Short-covering refers to investors reversing bets on further declines.
Output probably climbed 15 percent to 2 million tons last month, matching the record in September 2012, according to a Bloomberg News survey published on Oct. 7. Inventories expanded 13 percent to 1.89 million tons, while exports gained 2 percent to 1.55 million tons, the survey showed.
Soybeans for delivery in November declined 0.3 percent to $12.85 a bushel on the Chicago Board of Trade, while soybean oil for December gained 0.4 percent to 40.57 cents a pound.
Refined palm oil for January delivery increased 0.8 percent to 5,544 yuan ($906) a ton on the Dalian Commodity Exchange and soybean oil advanced 0.9 percent to 7,064 yuan.
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