Palm oil dropped on concern that a rally to the highest level in six weeks may crimp demand and as speculation intensified that there may not be further stimulus from the U.S., hurting commodities.
The November-delivery contract fell 2 percent to end at 3,029 ringgit ($971) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur, the lowest price at close in more than a week. Futures gained to 3,091 ringgit yesterday, the highest settlement for the most-active contract since July 16, as the worst U.S. drought in a generation drove soybeans to a record.
“On the macro-economic front, it’s about the stimulus package,” Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone from Singapore. Investors had “probably priced in the worst-case scenario” for the U.S. soybean crop, he said.
Federal Reserve Chairman Ben S. Bernanke probably won’t use an Aug. 31 speech at the Fed’s annual symposium in Jackson Hole, Wyoming, to suggest a third round of bond buying is imminent, according to JPMorgan Chase & Co. and High Frequency Economics. Members of the Federal Open Market Committee have been divided about whether to spur expansion.
Exports from Malaysia, the second-largest producer, rose 6.6 percent to 1.05 million tons in the first 25 days of August compared with 986,829 tons in the same period the previous month, surveyor Societe Generale de Surveillance said yesterday.
November-delivery soybeans were little changed at $17.1825 a bushel on the Chicago Board of Trade after surging to a record $17.605 yesterday. Soybean oil for December delivery fell 0.2 percent at 56.46 cents a pound. Palm oil and soybean oil are used in foods and fuels.
Palm oil for January delivery lost 1.3 percent to close at 8,174 yuan ($1,286) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month retreated 1.5 percent to end at 9,980 yuan a ton.