Jan. 7 (Bloomberg) -- Palm oil fell for a third day to a two-week low on expectations that inventories in Malaysia, the world’s biggest producer after Indonesia, probably held near a record last month as exports declined.
The contract for March delivery dropped 1.9 percent to 2,420 ringgit ($795) a metric ton on the Malaysia Derivatives Exchange, the lowest price at close for the most-active contract since Dec. 21. Palm oil lost 1.2 percent last week.
Stockpiles were 2.53 million tons in December compared to 2.56 million tons a month earlier, according to the median of estimates from six analysts and two plantation companies in a Bloomberg survey published today. Output probably fell 7.9 percent to 1.74 million tons, while exports dropped 3.6 percent to 1.6 million tons, the survey showed. The Malaysian Palm Oil Board is scheduled to release monthly data on Jan. 10.
“Selling pressure will still be there” as the stockpiles are high, said Ryan Long, vice president of futures and options at OSK Investment Bank Bhd. in Kuala Lumpur. “There’s a very good chance of stocks going down at a faster pace from next month onwards because of lower production.”
Output of the oil used in food and fuel peaks from July to October before tapering off from November, with January and February normally having the lowest output. Malaysia announced export-tax changes from Jan. 1 to help draw down the reserves.
Palm oil for May delivery fell 0.9 percent to end at 6,964 yuan ($1,118) a ton on the Dalian Commodity Exchange. Soybean oil for May retreated 0.9 percent to end at 8,688 yuan a ton.
Soybeans for March delivery gained 0.6 percent to $13.75 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March climbed 0.2 percent to 50 cents a pound.
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