(For physical price assessments, see MPOI1.)
Sept. 18 (Bloomberg) -- Palm oil fell to a one-month low on speculation that rain in the U.S. Midwest will halt deteriorating conditions of the soybean crop, boosting supplies of the oilseed crushed to make a substitute oil.
The contract for delivery in December declined 1.4 percent to 2,322 ringgit ($719) a metric ton on the Bursa Malaysia Derivatives, the lowest price at close for the most-active contract since Aug. 16. Palm oil for physical delivery in October was at 2,360 ringgit, data compiled by Bloomberg show.
Soybeans capped the longest slump in seven weeks yesterday amid speculation that rains in the main growing region in the U.S. will be beneficial for crop conditions that have declined for five straight weeks. Precipitation may be highest over the eastern Midwest, and the east and south portion of the western Midwest, while a lack of cold weather will help crops mature, forecaster DTN said in a report yesterday.
“Because of the rain in recent days, there is speculation that this could result in a healthier crop than what was earlier expected,” said Arhnue Tan, an analyst at Alliance Investment Bank Bhd. “Ample supplies of soybeans could mean that there could be less demand for palm oil.”
Soybeans for November were little changed at $13.43 a bushel on the Chicago Board of Trade. Futures, which dropped for the third straight session yesterday, have lost 2.8 percent this week after rallying 17 percent in the six weeks ended Sept. 13. Soybean oil for December delivery fell for a fourth day, retreating 0.4 percent to 42.06 cents a pound.
Refined palm oil for January delivery lost 0.4 percent to close at 5,392 yuan ($881) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month fell 0.5 percent to end at 7,070 yuan a ton.
--With assistance from Phoebe Sedgman in Melbourne. Editor: Thomas Kutty Abraham