World Economy

Palm Oil Makes Weak Start

Palm Oil Makes Weak StartPalm Oil Makes Weak Start

New months are typically meant to bring fresh cash into many market.

Indeed, many use this as an explanation for the so-called “January effect”, the idea that share markets in particular perform unusually strongly during the first month of the year. Friday brought little to dispel that notion, Agrimoney reported.

While Tokyo and mainland Chinese markets were not open, Sydney stocks gained 0.5%, Seoul shares 0.3% and Hong Kong shares were trading 1.1% higher.

  Short Term Impact

Palm oil, of which a major use is in making biodiesel, fell 1.2% to 2,238 ringgit a ton on its first trading day of 2015, having already recorded a drop of 14.8% over 2014.

No January effect here. Friday’s drop was viewed as being down to early-year profit-taking, after a late-2014 rally on fears for the impact of Malaysian flooding on output of the vegetable oil from the second-ranked producer, and exporter, of the vegetable oil.

  Wheat Prices

Wheat futures fell in 2014 for a second successive year, weighed by the strong world grain production result which hit prices of the likes of corn too.

Still, the decline was limited in the end to 2.6% in the Chicago contract, the world benchmark, which ended 26% above the five-year low reached in late September, in a recovery fuelled by concerns over Russia – both in terms of export curbs and a poor start for autumn-sown seedlings.

In fact, Chicago wheat, the world benchmark, fared better than its Paris peer, which dropped 4.3%, despite a fall of 12% in the euro against the dollar, improving the competitiveness of eurozone imports.