KUALA LUIMPUR: Palm oil gained as soybean prices surged to a one-month high on speculation that hot, dry weather will damage U.S. crops, lowering global oilseed supplies.
September-delivery palm oil advanced as much as 3.6% to 3,059 ringgit (US$958) a metric ton on the Malaysia Derivatives Exchange and was at 3,050 ringgit at 11:29 a.m. in Kuala Lumpur. Futures climbed 3.7% last week, paring this quarter’s 11% loss.
Dry weather will continue through to the end of June for most of the Midwest, where at least 50% of subsoil has been rated below normal since May 31, Chicago-based T-Storm Weather LLC said in a report. About 32% of the domestic crop is under stress, and temperatures will rise as the plants begin to pollinate, the forecaster said.
“The market is currently watching the continued hot, dry weather,” Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore. The weather may get worse and affect soybean yields, he said.
A crop-planting report from the U.S. Department of Agriculture due today may show that soybean conditions may not be as good as expected, Ker said.
Soybeans for November delivery gained as much as 3.2% to US$14.20 a bushel on the Chicago Board of Trade, the highest level for the most-active contract since May 21. Soybean oil for December delivery rose 2.8% to 51.92 cents a pound. Palm oil and soybean oil are used in foods and fuels.
Malaysia’s palm oil exports rose 4.4% to 1.2 million tons in the first 25 days of June from the same period in May, surveyor Intertek said today.
Palm oil for January delivery climbed 1.7% to 8,080 yuan (US$1,267) a ton on the Dalian Commodity Exchange. Soybean oil fir delivery in the same month gained 1.6% to 9,586 yuan a ton. (Bloomberg/T07/TW)
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