Palm Oil Drops as Rains Ease Soybean Crop Concerns in Argentina By Ranjeetha Pakiam
Jan. 12 (Bloomberg) -- Palm oil declined after soybeans
fell the most in seven weeks yesterday as the threat of crop
damage from dry weather in South America eased following rain in
Argentina and on forecasts for precipitation in Brazil.
The March-delivery contract dropped as much as 1.1 percent
to 3,198 ringgit ($1,018) a metric ton on the Malaysia
Derivatives Exchange and was at 3,219 ringgit in at 3:34 p.m.
Kuala Lumpur.
An inch (2.5 centimeters) to 2 inches of rain fell in much
of Argentina, reducing crop stress on 75 percent of the corn and
soybean fields, Commodity Weather Group LLC said in a report
yesterday. Rains in the past 36 hours in Argentina should have
helped stabilize crop yield forecasts somewhat, although more
rain will be needed after the recent extreme heat in the region,
Telvent DTN Inc. said in a report yesterday.
The “palm oil market is following the soybean oil price
yesterday,” Ryan Long, vice president of futures and options at
OSK Investment Bank Bhd., said by phone from Kuala Lumpur.
“There’s been news about the La Nina phenomenon getting weaker,
so people who were betting on the price going higher due to
weather are either taking-profit or reducing their position.”
The La Nina weather event that parched crops in Argentina
and Brazil and flooded plantations in Thailand and Malaysia may
be weakening, Telvent said yesterday. The Southern Oscillation
Index, used to measure its strength, has declined since peaking
in December, signaling it “has topped out,” said Bryce
Anderson, an agricultural meteorologist.
Soybean oil, a substitute for palm oil, for delivery in
March fell 1.2 percent to 51.89 cents a pound on the Chicago
Board of Trade yesterday. Futures were at 52 cents at 3:20 p.m.
in Singapore today. Soybeans for March delivery gained as much
as 0.6 percent to $12.10 a bushel, rebounding from a 2.4 percent
decline yesterday.
Palm oil for delivery in September dropped 0.4 percent to
close at 8,140 yuan ($1,288) per ton on the Dalian Commodity
Exchange, while soybean oil for delivery in the same month slid
0.4 percent to end at 9,082 yuan a ton.
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