Palm Gains 1st Time in 4-Days

PALM oil futures yesterday gained for the first time in four days on speculation that an 8 per cent drop in the previous three days was excessive and may lure buyers. The futures slipped below RM2,000 a metric ton Wednesday for the first time since March 31 on concern a seasonal increase in production in the second half would swell stockpiles and after soybeans, crushed to produce a rival edible oil, dropped to the lowest in more than three months. “While we are of the view that prices are not likely to turn around in a significant manner from current levels over the next few months, we believe that the RM2,000 a ton mark is a good fundamental support level,” a report by RHB Research Institute analyst Hoe Lee Leng said yesterday. Palm oil for September delivery on the Malaysia Derivatives Exchange gained 2.3 per cent to RM2,047 a ton after earlier touching RM2,000. Prices won’t “fall substantially below” RM2,000 in the short term, the RHB Research report said. Palm oil for January delivery in Dalian closed unchanged, after falling for five days for a loss of 9.6 per cent, at 5,542 yuan a ton. China is the biggest consumer of edible oils and the largest importer of palm oil. Oil crushed from soybeans competes with palm oil as the two are used in applications including cooking and biofuel. Soybean oil is trading at a premium of about 29 per cent to palm oil, according to Bloomberg data. Stockpiles in Malaysia gained for the first time in six months in May as production climbed 8.5 per cent, the biggest month-on-month increase in a year, the Malaysian Palm Oil Board said on June 10. It will announce June data today. Source : Business Times

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