Palm has biggest weekly gain since december on soybean outlook

Palm has biggest weekly gain since december on soybean outlook
Business & Markets 2013
Written by Bloomberg
Friday, 16 August 2013 20:25

(Aug. 16): Palm oil posted the biggest weekly gain in eight months as soybeans rallied on concern that the U.S., the largest grower of the oilseed crushed to make an alternative oil, may harvest a smaller crop than forecast.

The contract for November delivery, with the highest open interest and volume, climbed 0.3 percent to close at 2,305 ringgit ($704) a metric ton on the Bursa Malaysia Derivatives. Futures gained 5.2 percent this week, the steepest increase since the five days ended Dec. 21, 2012. Palm for local physical delivery in September was at 2,385 ringgit, according to data compiled by Bloomberg.

Soybeans in Chicago are headed for the best weekly advance in more than a year as the U.S. cut forecasts for the harvests this year after excessive rains in May and June reduced planted acreage and damaged yields. About 1.619 million acres of land originally slated for soybeans were left unplanted, the USDA said yesterday. That compares with 159,579 in 2012, government data show. More than a third of the Midwest remains “notably dry,” Commodity Weather Group LLC said in a report.

"The expectations were for the U.S. soybean crop to be quite good this year and the South American crops were also reaching destination markets so the supply issues were perceived to have eased,” Alvin Tai, an analyst with RHB Investment Bank Bhd., said by phone in Kuala Lumpur. “Now with this dry period in North America, people are repositioning for higher prices.”

Exports Gain

Soybean oil for delivery in December fell 0.2 percent to 43.37 cents a pound on the Chicago Board of Trade. Soybeans for November dropped 0.6 percent to $12.58 a bushel. The most active contract has advanced 6.5 percent this week, the most since the five days ended July 20, 2012.

Palm oil also gained as data this week showed an increase in exports from Malaysia, Tai said. Shipments surged 18 percent to 644,589 tons in the first 15 days of August, Intertek said yesterday, while SGS (Malaysia) Sdn. reported a 19 percent gain. Malaysia kept the export tax on crude palm oil for September unchanged at 4.5 percent for a seventh month, according to a Customs Department statement on the Malaysian Palm Oil Board website.

Refined palm oil for January delivery advanced 1.2 percent to close at 5,610 yuan ($917) a ton on the Dalian Commodity Exchange. Soybean oil added 0.9 percent to end at 7,186 yuan a ton.