20120113 1532 Palm Oil Breaking News.

Palm Oil Drops as USDA Forecasts Bigger U.S. Soybean Supplies
2012-01-13 05:44:27.796 GMT


By Ranjeetha Pakiam
    Jan. 13 (Bloomberg) -- Palm oil fell to a two-week low,
heading for the first weekly loss in four, on speculation that a
bigger U.S. soybean crop will boost global cooking oil supplies.
    The March-delivery contract dropped as much as 1.4 percent
to 3,156 ringgit ($1,007) a metric ton on the Malaysia
Derivatives Exchange in Kuala Lumpur, the lowest since Dec. 30,
and ended the morning trading session at 3,160 ringgit in Kuala
Lumpur. Palm oil is set for a 1.6 percent decline this week, the
first drop since the five days ended Dec. 16.
    U.S. inventories of soybeans on Aug. 31, before this year’s
harvest, will be 20 percent larger than forecast a month ago at
275 million bushels, the most in five years, the U.S. Department
of Agriculture said in a report yesterday. The forecast was
raised for a third straight month and tops the 232 million
bushels forecast by analysts. The U.S. soybean crop was larger
than estimated a month ago, the government said.
    “The USDA is estimating higher production and the ending
stock is also estimated to be higher as well,” Ker Chung Yang,
an analyst at Phillip Futures Pte., said by phone from Singapore
today. “The palm market will come under pressure due to the
decline in the soybean market” yesterday, he said.
    Soybeans for March delivery dropped 1.7 percent to close at
$11.825 a bushel on the Chicago Board of Trade yesterday.
Futures traded 0.5 percent higher today at $11.8825 at 12:56
p.m. in Singapore. Soybean oil, a substitute for palm oil, for
delivery in March was little changed at 51.46 cents a pound.
    Soybeans have “underlying support” from concern that the
Argentine and Brazilian crops will be hit by hot, dry weather,
said Ker.
    Palm oil for delivery in September dropped as much as 1.2
percent to 8,042 yuan ($1,274) per ton on the Dalian Commodity
Exchange, while soybean oil for delivery in the same month slid
as much as 0.9 percent to 9,002 yuan a ton.