Palm Oil Rallies for First Time in Four Days on Weather Risks
The February-delivery contract advanced as much as 0.8 percent to 3,023 ringgit ($950) per metric ton on the Malaysia Derivatives Exchange before ending the morning session at 3,014 ringgit in Kuala Lumpur. The contract fell 3.9 percent in the past three sessions.
Hot weather may redevelop in Argentina’s soybean, corn and wheat areas over the weekend and no significant rain is expected through Dec. 18, Telvent DTN Inc. said in a forecast yesterday. In Brazil, soybean crops are still vulnerable to damage from dryness later in the month and in January, it said.
“Dry weather will be a concern for the soybean crop, especially in Brazil,” Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore. “Regional weather concerns including forecasts of floods in Indonesia’s growing regions in December will also provide support to palm oil.”
January-delivery soybeans gained as much as 0.5 percent to $11.175 a bushel on the Chicago Board of Trade before trading at $11.1175 at 1:31 p.m. Singapore time, while soybean oil for March gained as much as 0.5 percent to 49.97 cents a pound.
Palm oil for delivery in May climbed as much as 0.5 percent to 7,896 yuan ($1,241) per ton on the Dalian Commodity Exchange and soybean oil for September advanced 0.6 percent to 8,774 yuan.
Output in Malaysia, the second-biggest producer after Indonesia, declined 14.8 percent to 1.6 million tons in November from a two-year high the previous month after the peak-harvest season ended, the Malaysian Palm Oil Board said today. Production was estimated at 1.7 million tons in a Bloomberg News survey of four analysts and two plantation companies first published on Dec. 6.
“The peak-production period is over,” Ker said. “Harvesting was also affected by adverse weather.”
Stockpiles declined 1.5 percent to 2.1 million tons, while exports shrank 9.9 percent to 1.7 million tons, the board said after the close of morning trade.
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