Palm oil dropped the most in almost two months as crude oil declined and on concerns record soybean supplies from South America will reduce the need for substitutes.
May-delivery futures lost 2.2 percent to close at 2,590 ringgit ($780) a metric ton, the lowest level since Feb. 24, on the Malaysia Derivatives Exchange. Crude for April delivery was down 0.4 percent at $80.88 a barrel in New York.
“A slight pullback could be under way this week” for crude oil, and with palm oil failing to advance beyond 2,726 ringgit last week, “follow-through selling can be expected,” a technical report by RHB Research Institute Sdn. said today.
Soybeans for May delivery slid as much as 0.4 percent to $9.2175 a bushel in Chicago and traded at $9.24 at 6 p.m. Singapore time. Prices may drop below $9 a bushel as China, the biggest importer, switches more cargoes from the U.S. to South America, according to a Bloomberg survey on March 12.
Brazil’s soybean processors raised their crop forecast for the current marketing year to 67.6 million tons. The outlook for production in the year that started Feb. 1 was raised from 65.2 million tons estimated on Jan. 26, Abiove, as the association is known, said March 12.
In the physical market in Indonesia, the largest palm oil grower, 5,000 tons was sold in auctions. Palm oil for delivery from Belawan port fetched 7,606 rupiah a kilogram ($830 a ton), compared with 7,777 rupiah on March 11. The country failed to sell 8,750 tons on March 12 because of low bids.
Sales from Malaysia, the second-largest producer, climbed 18 percent in the first 15 days of this month to 669,227 tons, Intertek said. Shipments to China surged 29 percent to 191,059 tons, and to India and the subcontinent by 25 percent to 165,456 tons, Intertek said.
Overall exports gained 5.1 percent to 638,548 tons in the period, according to Societe Generale de Surveillance.
India imported 2.39 million tons in the four months ended February, up from 2.33 million tons a year earlier, according to data from the Solvent Extractors’ Association of India today.
Inbound shipments of vegetable oils may reach a record 9.1 million tons in the year ending Oct. 31, up from 8.66 million tons a year ago, a processor’s group said March 12. Purchases will include 7 million tons of palm oil-products, said BV Mehta, co-chairman of the crop committee of the Central Organization for Oil Industry & Trade.
In China, the largest edible oils user, September-delivery palm oil dropped 1 percent to 6,848 yuan a ton on the Dalian Commodity Exchange while soybeans lost 0.4 percent to 3,800 yuan.
–Editor: Ravil Shirodkar
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