Palm Oil Advances as Prices Near Seven-Month Low Boost Demand
Palm oil climbed for a second day as prices near the lowest level in more than seven months spurred demand from importers.
The contract for delivery in October gained as much as 0.5 percent to 2,283 ringgit ($720) a metric ton on the Bursa Malaysia Derivatives and ended the morning session at 2,277 ringgit. Futures lost 5.4 in the past two weeks, reaching 2,222 ringgit on July 16, the lowest price for most-active futures since Dec. 13. Palm for local physical delivery in August was at 2,335 ringgit yesterday, data compiled by Bloomberg show.
“At these levels buyers are happy to buy,” said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. There is no “aggressive buying due to expectations of higher production” in the coming months, he said.
Palm oil output may accelerate from August to October leading to a buildup in stockpiles in Malaysia, the world’s second-largest producer, Thomas Mielke, executive director of Hamburg-based researcher Oil World, said yesterday. Production is typically highest from July to October each year.
Soybean oil for delivery in December climbed 0.5 percent to 45.54 cents a pound on the Chicago Board of Trade. Soybeans for delivery in November were little changed at $12.875 a bushel. Refined palm oil for January delivery gained 0.2 percent to 5,628 yuan ($917) a ton on the Dalian Commodity Exchange. Soybean oil advanced 0.7 percent to 7,308 yuan.
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