Palm oil advanced for a third day, tracking gains in soybeans, as dry weather in parts of Argentina dims the prospect for global supply of the oilseed crushed to make soybean oil and animal feed.
Palm oil for delivery in May rose as much as 0.7 percent to 2,584 ringgit ($835) a metric ton on the Malaysia Derivatives Exchange. The contract traded at 2,568 ringgit at the midday close, extending this week’s advance to 2.5 percent.
Soybean production in Argentina, the world’s largest shipper of the edible oil crushed from the oilseed, will probably reach 50 million tons this marketing year, lower than the 52 million tons predicted last month as dry weather hurt crops, according to an Oil World report yesterday. That will trim the total output of seven oilseeds, including soybeans and palm kernel, by 1.4 million tons to 455.9 million tons from an estimate made a month earlier, it said.
“The price action today has more to do with soybeans having a very strong rally overnight,” Victor Thianpiriya, an agricultural analyst at Australia & New Zealand Banking Group Ltd., said by phone from Singapore today. “Concerns over Argentina’s soybean outlook” are pushing prices higher, he said.
Soybeans for May delivery climbed as much as 0.7 percent to $14.68 a bushel on the Chicago Board of Trade, the highest price since Feb. 8. Futures advanced 3 percent yesterday.
Soybean oil for May delivery traded little changed at 52.85 cents a pound in Chicago after rallying 1.7 percent yesterday. The cooking oil’s premium to palm oil was at $333.93 a ton today. The two are the most consumed edible oils in the world used in food and fuel.
Palm oil exports from Malaysia rose 0.6 percent to 835,612 tons in first 20 days of February from 830,830 tons in the same period a month earlier, surveyor Intertek said in an e-mailed statement. Shipments surged 18 percent to 673,555 tons in the first 15 days of the month, it said Feb. 15.
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