Palm oil drops on soybean speculation

Palm oil declined from the highest close in more than 13 months on speculation that US farmers may increase soybean planting, potentially boosting supplies of the crop that can be crushed to make a substitute oil. The June-delivery contract fell as much as 1.4 per cent to 3,563 ringgit (Dh4,265) a metric tonne on the Malaysia Derivatives Exchange, the biggest intraday drop for a most-active contract since January 30, and was at 3,592 ringgit at 3.31pm in Kuala Lumpur. Futures closed at 3,613 ringgit on April 10, the highest since March 7, 2011. Markets in Malaysia were closed on Wednesday for a holiday. Gain The soybean premium to corn in the harvest season has gained 18 per cent since January 31, bolstering profit prospects for the oilseed, which is cheaper to produce, Brian Basting, an analyst at Advance Trading, said yesterday. Soybeans rallied 16 per cent between January and March, the biggest quarterly price rally in more than a year. "There's talk that more acreage may be switched to soybeans from corn, because the soybean price is more attractive," said Chandran Sinnasamy, trading head at Kuala Lumpur- based LT International Futures (M) Sdn. From: Gulfnews