Palm Gains to One-Month High as Slow Output to Cap Inventories
Palm oil advanced to the highest level in more than a month on speculation that stockpiles in Malaysia, the world’s second-largest producer, will remain below 2 million tons for a second month as output growth slows.
The contract for July delivery climbed as much as 1 percent to 2,341 ringgit ($780) a metric ton on the Bursa Malaysia Derivatives, the highest price for the most-active futures since April 12, before trading at 2,323 ringgit by 12:02 p.m. in Kuala Lumpur. Futures gained 3 percent last week.
Reserves fell 11 percent to 1.93 million tons in April, the lowest level since June, according to the Malaysian Palm Oil Board. That was less than the median estimate of 2.06 million tons in a Bloomberg survey. Output climbed 3.1 percent to 1.37 million, while exports dropped 5.6 percent to 1.45 million tons, the board said May 10.
“We expect the slower output growth to sustain in the current month and this will help keep stocks at around 1.92 million tons at the end of May,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. Demand from importers should pick up before the Muslim fasting month of Ramadan, starting in July this year, she wrote in a report dated May 11.
Exports from Malaysia plunged 17 percent to 380,047 tons in the first 10 days of this month, surveyor Intertek said May 10. Shipments dropped 18 percent to 377,193 tons from the same period in April, according to Societe Generale de Surveillance.
Stockpiles at major ports in China, the second-biggest importer, climbed last week to a record 1.35 million tons, up about 50,000 tons from a week earlier, the China National Grain and Oils Information Center said in a report e-mailed today.
Refined palm oil for September delivery was little changed at 6,128 yuan ($997) a ton on the Dalian Commodity Exchange, while soybean oil fell 0.4 percent to 7,498 yuan. On the Chicago Board of Trade, soybeans for July gained 0.2 percent to $14.015 a bushel. Soybean oil rose 0.2 percent to 49.32 cents a pound.
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