KUALA LUMPUR: Palm oil advanced for a second day on speculation that inventories in Malaysia, the second-largest producer, probably dropped for a fifth month.
The contract for August delivery climbed as much 0.6 percent to RM2,417 (US$782) a metric ton on the Bursa Malaysia Derivatives, and ended the morning session at RM2,415 in Kuala Lumpur. Futures surged to RM2,420 on May 29, the highest price for the most-active futures since March 28. Palm for physical delivery in June was at RM2,380 today, according to data compiled by Bloomberg.
Stockpiles dropped 3.5 percent to 1.86 million tons in May, the least since June 2012, according to the median of estimates in a Bloomberg survey published yesterday. Output increased 4.6 percent to 1.43 million tons last month, while exports declined 2 percent to 1.42 million tons, the survey showed. The Malaysian Palm Oil Board is scheduled to release official data on June 10.
"With the backdrop that stocks could further drop, I don't think anyone will try to sell," Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt., said by phone from Mumbai. "There is genuine interest on the buying side. The sentiment is in favor of prices rising, so any dips are being taken advantage of."
Soybean oil for July was little changed at 48.36 cents a pound on the Chicago Board of Trade, while soybeans dropped 0.3 percent to US$15.2675 a bushel. Refined palm oil for January delivery advanced 1.1 percent to 6,178 yuan ($1,008) a ton on the Dalian Commodity Exchange, while soybean oil for delivery in September climbed 0.2 percent to 7,424 yuan. -- BLOOMBERG
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