South American soy hit palm oil prices

07-03-2007 | |

Palm oil futures in Malaysia fell on speculation that record soybean crops in South America may boost soybean oil output and reduce demand for competing palm oil.

Farmers in Brazil will boost output of the soybeans 6.2% to 56.7 million
metric tons this year and top a February estimate of 56.3 million tons, the
government said. Harvests in Argentina are also expected to rise. Brazil is the
world’s second-largest producer of soybeans and Argentina is the biggest
exporter of animal feed and vegetable oil produced from soybeans.

oil for May delivery fell 6 ringgit, or 0.3%, to 1,937 ringgit ($552) a ton on
Tuesday at noon on the Malaysia Derivatives Exchange.

Some investors expected the US Department of Agriculture to raise its
estimates for South American soybean production and put further pressure on
soybean prices, an analyst on the futures market said.

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