Nov. 9 (Bloomberg) -- Palm oil dropped to the lowest level in more than five weeks on deepening concern that stockpiles in Malaysia, the largest producer after Indonesia, will expand from a record as production peaks.
The contract for January delivery fell 0.9 percent to 2,316 ringgit ($756) a metric ton on the Malaysia Derivatives Exchange, the lowest price at close for the most-active contract since Oct. 2. Futures retreated 7.2 percent this week, the second straight week of losses and the most since the five days ended Sept. 28.
Reserves in Malaysia probably climbed 8.9 percent to 2.7 million tons in October from an all-time high of 2.48 million tons in September, according to a Bloomberg survey. Output remained at a monthly high of 2 million tons for a second month, the survey showed. The Malaysian Palm Oil Board is scheduled to release monthly data on Nov. 12.
“People are still talking about the stockpiles and rising production in Malaysia,” Ryan Long, a vice president of futures and options at OSK Investment Bank Bhd., said by phone.
Palm-oil exports from Indonesia, the world’s largest producer, will probably climb 13 percent to 1.6 million tons this month to the highest level since January, according to a Bloomberg survey. Imports by India, the biggest buyer, probably climbed 23 percent to 750,000 tons in October after a slump in prices spurred traders to stockpile to meet festival demand, another survey showed.
Soybean oil for December delivery slid 0.9 percent to 48.35 cents a pound on the Chicago Board of Trade. Soybeans for January delivery declined 0.7 percent to $14.8575 a bushel, the lowest level since July 3. Palm and soybean oils are substitutes in food and fuel uses.
Palm oil for May delivery lost 1.2 percent to 6,708 yuan ($1,075) a ton on the Dalian Commodity Exchange, the lowest close for the most active contract since July 2010. Soybean oil for the same month fell 1.6 percent to end at 8,614 yuan a ton, the lowest price for the most-active contract since November 2011.
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