Palm oil declined on speculation that record inventories in Malaysia may expand this month, while a failure to prevent the so-called fiscal cliff in the U.S. raised the risk of a global recession.
The contract for February delivery lost as much as 1 percent to 2,386 ringgit ($781) a metric ton on the Malaysia Derivatives Exchange and traded at 2,390 ringgit at 3:36 p.m. in Kuala Lumpur. Futures are headed for a third monthly decline.
Inventories reached 2.51 million tons in October, according to the Malaysian Palm Oil Board. Shipments fell 1.8 percent to 1.28 million tons in the first 25 days of November from a month earlier, Intertek said on Nov. 26. Senate Majority Leader Harry Reid said yesterday Democrats and Republicans have made little headway in negotiations over how to avoid a year-end deadline that would trigger automatic tax rises and spending cuts.
“Sentiment is weak,” said Ivy Ng, an analyst at CIMB Group Holdings Bhd., referring to the fiscal-cliff concern and its possible impact. Investors were also waiting for clear signals on inventories and exports from Malaysia, she said.
Soybean oil for delivery in January lost 0.7 percent to 50.04 cents a pound on the Chicago Board of Trade. Soybeans for January delivery dropped 0.2 percent to $14.47 a bushel.
Palm oil for May delivery fell 1 percent to close at 6,740 yuan ($1,082) a ton on the Dalian Commodity Exchange. Soybean oil for the same month was little changed at 8,576 yuan a ton.
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