PALM oil slumped for a fifth day on concern a record U.S. soybean harvest will boost production of rival soybean oil, eroding demand for the tropical commodity.
Palm oil, which competes with soybean oil in its use for cooking oil and biofuel, dropped to the lowest level since July 30.
Soybeans and soybean oil in Chicago declined Sept 4 amid speculation that August rain improved prospects for the oilseed crop in the U.S., the world’s largest grower and exporter.
The U.S. soybean harvests “is just around the corner and buyers are still waiting for that to come out,” Ben Santoso, an analyst of DBSVickers Securities (Singapore), said by telephone today.
“We don’t export some kind of a recovery in terms of prices until sometime next month.”
November-delivery palm oil fell as much as 2.3 per cent to RM2,146 (US$610) a ton on the Malaysia Derivatives Exchange. It paused at RM2,155 at the 12:30 p.m. break in trading. Futures lost 7.3 per cent last week, the most since Feb 20.
The U.S. soybean crop will reach a record 3.305 billion bushels, topping the U.S. Department of Agriculture’s August forecast of 3.199 billion, Informa Economics Inc. said Sept. 3. Last year, about 2.959 billion bushels were collected. The 2009 harvest may reach 3.372 billion bushels with favorable September weather for crops to mature, Informa said.
Soybeans for November delivery lost 2.1 per cent to end at US$9.22 a bushel on Sept 4 in Chicago after touching US$9.205, the lowest level since July 30. The price declined 8.8 percent last week, the biggest weekly drop since July 10.
December-delivery soybean oil fell 1.2 per cent to close at 34.23 cents a pound in Chicago. The price dropped 6.7 per cent last week, the most since July 10. The U.S. market is closed today for the Labor Day holiday.
Soybean oil for May 2010 delivery dropped 1.3 per cent to 7,042 yuan ($1,031) a ton on the Dalian Commodity Exchange at the 11:30 local time break. May-delivery palm oil fell 1.3 per cent to 5,994 yuan a ton. – Bloomberg Source : Business Times
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