Feb. 26 (Bloomberg) -- Palm oil dropped to the lowest level in more than five weeks after trader Dorab Mistry said that palm’s outlook for 2013 is bearish, with global output of oilseeds poised to climb on increased acreage.
The contract for May delivery fell 2.2 percent to 2,417 ringgit ($780) a metric ton on the Malaysia Derivatives Exchange, the lowest price at close for the most-active month since Jan. 18. Futures declined for a fifth day, the worst run since Dec 5, erasing gains this year.
Palm oil will probably fall this year after Asian producers boosted acreage and global oilseed supplies rose, said Mistry, a Godrej International Ltd. director who’s traded the commodity for more than 30 years. The expansion of estates will raise output, while bad weather that disrupted soybean supplies in 2012 will prompt farmers to ramp up harvests, Mistry told Bloomberg in comments published today. Soybean oil also fell.
“Mistry’s comments would have contributed to additional bearish sentiment,” Arhnue Tan, an analyst at Alliance Investment Bank Bhd., said in Kuala Lumpur. “Production numbers haven’t dropped off very significantly, so there’s not a lot of confidence inventories would drop significantly.”
Stockpiles in Malaysia held near a record in January, the nation’s palm oil board said. While production fell 10 percent compared with December, it was still 24 percent higher than the same month last year.
World soybean harvests will reach a record 278 million tons in 2013, Aaron Brown, an oilseed merchandiser and trader for Alfred C. Toepfer Ltd., said yesterday. U.S. farmers will expand sowing, taking the harvest to an all-time high of 3.4 billion bushels, and doubling inventories by Aug. 31, 2014 to 250 million bushels, the Department of Agriculture said Feb. 22.
Soybean oil for May delivery fell 1.2 percent to 49.83 cents a pound on the Chicago Board of Trade. Its premium to palm oil was $319.99. They are the most consumed oils. Soybeans for May delivery dropped 0.7 percent to $14.25 a bushel.
Refined palm oil for delivery in September dropped 1.2 percent to close at 6,702 yuan ($1,076) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month fell 1.3 percent to end at 8,312 yuan a ton, the lowest price for most-active futures since September 2010.
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