Palm Oil Gains on Speculation Malaysian Inventories DeclinedRanjeetha Pakiam
Palm oil climbed for the first time in four days on speculation that stockpiles in Malaysia probably declined last month.
The contract for July delivery advanced 0.4 percent to close at 2,260 ringgit ($758) a metric ton on the Bursa Malaysia Derivatives. Futures, which lost 7.3 percent this year, reached 2,230 ringgit yesterday, the lowest since Dec. 13.
Reserves in Malaysia, the world’s second-largest producer, decreased 5.1 percent to 2.06 million tons in April, the least since July, a Bloomberg survey published yesterday showed. Shipments were 1.44 million tons in April, 8.3 percent more than a year earlier, according to the survey. Official data are due for release on May 10.
“A lot of people are expecting inventories to go a little bit lower in April because of slightly better demand,” said Benny Lee, chief market strategist at Jupiter Securities Sdn. “We’re probably going to see higher production from May onward, so the rebound will happen, but I will not expect it to rally strongly.”
Production in Indonesia, the largest supplier, may reach 28 million tons this year from 25.7 million tons in 2012, Derom Bangun, chairman of the country’s palm oil board, said today. That was lower than a February forecast of 30 million tons.
Soybeans for July delivery gained 0.7 percent to $13.7825 a bushel on the Chicago Board of Trade. Soybean oil climbed 0.5 percent to 48.98 cents a pound.
Refined palm oil for September delivery declined 0.7 percent to close at 5,904 yuan ($959) a ton on the Dalian Commodity Exchange. Soybean oil for same month delivery retreated 0.2 percent to end at 7,362 yuan a ton.