Palm Hits 15-Week High on Weather Fears

MALAYSIAN crude palm oil futures rose as much as 0.9 per cent today to
hit a near-fifteen week high on fears that more rainy weather would cut
into production.

Palm oil scaled its highest since Aug 14, largely ignoring weaker
crude oil prices and slightly higher export data released by cargo
surveyor Intertek Testing Services.

Malaysian planter Genting Plantations has given guidance of lower
November and December output due to heavy rains and flash floods for
its estates in Sabah — a top oil palm growing state in Borneo island,
Kenanga Investment Bank said in a note.

The benchmark February contract on the Bursa Malaysia Derivatives
Exchange rose as much as RM23 to RM2,501 (US$740.8). By midday, the
most-active contract was trading up RM15 at RM2,493.

“The 2,500-ringgit level is a tough nut to crack,” said a trader with a foreign commodities broker.

“Weather is a great concern and the earlier export data was not so
fantastic. We are waiting for Societe Generale de Surveillance data to
confirm this.”

Cargo surveyor Intertek Testing Services reported today that
Malaysian palm oil exports for Nov 1-25 only rose 1.2 per cent to 1.13
million tonnes from the same period a month ago. SGS will give its
estimates later in the day.

Expectations of higher exports come as heavier rains sap palm oil
yields in the central state of Pahang and the prospect of floods could
complicate the transport of the vegetable oil to refineries and ports.

Oil prices slipped below US$76 a barrel on Tuesday, weighed by the
slower-than-expected U.S. growth, although most vegetable oil markets
priced in demand-supply factors instead.

U.S. soyoil for Dec. Delivery rose 0.5 per cent in Asian trade on
strong import demand and the most-active September soybean oil contract
on China’s Dalian Commodity exchange inched higher. – Reuters

Source : Business Times

Leave a Reply