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Palm Oil Drops Before Malaysia Releases Inventory, Output Data

April 9 (Bloomberg) -- Palm oil retreated from the highest level in more than a week before the release of data from Malaysia which may show that inventories dropped last month, while output increased in the world’s second-biggest producer.

The contract for June delivery fell 0.2 percent to close at 2,395 ringgit ($789) a metric ton on Bursa Malaysia Derivatives. Futures closed 1.7 percent higher at 2,400 ringgit yesterday, the most expensive price since March 28.

Reserves probably shrank 7 percent to 2.27 million tons in March from a month earlier, the steepest drop since January 2011, according to the median of estimates from two plantation companies and four analysts in a Bloomberg survey published yesterday. Output gained 2.3 percent to 1.33 million tons, while shipments rose 2.1 percent to 1.43 million, the survey showed. The Malaysian Palm Oil Board releases the data tomorrow.

“Yesterday, prices went up a lot, so there could be some mild profit-taking ahead of the data,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. “People may have taken the view that stocks are going to be down, and therefore it’s going to be positive, but given that prices have reacted ahead of the data and with no fresh leads, some people may decide to just take profit.”

Stockpiles have fallen 7.2 percent to 2.44 million tons in February from a record 2.63 million tons in December, board data show. Exports gained 5.5 percent to 1.37 million tons in March, Societe Generale de Surveillance said April 1, while shipments rose 2.8 percent to 1.36 million tons, said Intertek.

Exports, Stockpiles

“Everyone is quite uncertain of the current data,” said Benny Lee, chief market strategist at Jupiter Securities Sdn. in Kuala Lumpur. “Most of them would expect the inventory to go down a bit, but they’re still quite pessimistic about exports. Looking at the figures from the cargo surveyors, it may not really pull down inventories so much.”

Soybean oil for May delivery rose 0.2 percent to 49.64 cents a pound on the Chicago Board of Trade. Soybeans for delivery in May were little changed at $13.7925 a bushel.

Refined palm oil for September delivery advanced 0.7 percent to close at 6,326 yuan ($1,020) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month gained 0.2 percent to end at 7,930 yuan a ton.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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