Palm Oil Rises on Lower Output Expectations

PALM oil climbed for a third day on anticipation Malaysia’s palm oil output in December may be lower than the preceding month, preventing stockpiles from rising amid a slowdown in exports. “Producers are mostly in a wait-and-see mode as there is no pressure to dispose in a big way,” Ryan Long, a trader at OSK Investment Bank in Kuala Lumpur, said in an e-mailed reply to questions. “Physical market is trading at a discount versus futures, this makes them more reluctant to sell.” March-delivery palm oil advanced as much as 1.5 per cent to RM2,632 (US$765) a ton on the Malaysia Derivatives Exchange and traded at RM2,611 at 12:30 p.m. midday break. Futures have surged 54 percent this year on demand from India and China, the top users. Prices have more than doubled in the past decade. “Technically, a long position is still in favor as prices are trading in an uptrend channel,” Long said.

Soybeans for March delivery climbed 30 cents, or 3 per cent, to US$10.38 a bushel in Chicago yesterday, the biggest gain since Oct 12, on speculation that fund managers will buy commodities at the start of 2010, anticipating improved demand for materials as the global economy strengthens. The oilseed has climbed 5.6 per cent this year, partly because of improved Chinese demand for crops from the U.S. September-delivery palm oil traded on the Dalian Commodity Exchange gained as much as 1.4 per cent to 7,116 yuan a ton. Soybean oil, a substitute for palm oil, rose 3 per cent to 40.05 cents a pound in Chicago yesterday. – Bloomberg Source : Business Times
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