Palm oil climbed to the highest level in six weeks on speculation that output may drop this month in Malaysia, cutting inventories for a fifth month in the world’s second-largest producer.
The contract for August delivery rose as much as 0.6 percent to 2,374 ringgit ($782) a metric ton on the Bursa Malaysia Derivatives, the highest price for most-active futures since April 11, before trading at 2,373 ringgit at 11:32 a.m. in Kuala Lumpur. Futures are heading for a third weekly gain. The exchange is closed tomorrow for a public holiday.
“Production in May is likely to be lower by about 4 percent to 5 percent and stocks are likely to reduce,” said Donny Khor, deputy director of futures and commodities at RHB Investment Bank Bhd. in Kuala Lumpur. “Markets should have some kind of underlying support at the 2,280 ringgit to 2,300 ringgit level.”
Reserves declined 11 percent to 1.93 million tons last month and have dropped 27 percent from a record in December, according data from the Malaysian Palm Oil Board. Output rose 3.1 percent to 1.37 million tons in April, board data shows.
Refined palm oil for September delivery declined 0.3 percent to 6,086 yuan ($992) a ton on theDalian Commodity Exchange, while soybean oil fell 0.3 percent to 7,512 yuan. On the Chicago Board of Trade, soybeans for July delivery rose 0.2 percent to $14.975 a bushel and soybean oil for the same month was little changed at 49.60 cents a pound.
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Source : Bloomberg