Palm Oil Drops to One-Week Low on Near Record Malaysian Reserves
Palm oil fell for a third day to a one-week low on speculation 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 as much as 1.2 percent to 2,438 ringgit ($801) a metric ton on the Malaysia Derivatives Exchange, the lowest price for the most-active contract since Dec. 31, and was at 2,443 ringgit at 12:04 p.m. in Kuala Lumpur. Palm oil lost 1.2 percent last week.
Stockpiles of the oil used in food and biofuels were 2.53 million tons in December compared to an all-time high of 2.56 million tons a month earlier, according to the median of estimates from six analysts and two plantation companies in a Bloomberg survey. 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 official data on Jan. 10.
“Selling pressure will still be there” as 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 peaks from July to October before tapering off from November, with January and February normally recording the lowest output.
Soybeans for March delivery gained 0.9 percent to $13.795 a bushel on the Chicago Board of Trade. Soybean oil for delivery in March climbed 0.5 percent to 50.14 cents a pound.
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