The contract for July delivery advanced as much as 1.3 percent to 2,302 ringgit ($759) a metric ton on the Bursa Malaysia Derivatives, before ending the morning session at 2,281 ringgit in Kuala Lumpur. Futures are headed for a 4.1 percent decline in April.
Soybeans, which can be crushed to make soybean oil, rallied to a one-month high in Chicago today on speculation that demand for U.S crop will increase as supplies from Brazil slowed. Growers in Brazil sold 66 percent of the 2012-2013 crop, compared with 75 percent a year ago, research firm Safras & Mercado said yesterday. Palm and soybean oils are the most consumed edible oils in the world.
“China is turning its demand to U.S. because it’s not able to get it from Brazil because of the congestion at ports,” said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. “Soybeans will continue to remain volatile and probably that is where palm oil will take further cues.”
Soybeans for July delivery advanced as much as 0.4 percent to $14.15 a bushel on the Chicago Board of Trade, the highest price for the most-active contract since March 28. Soybean oil for July delivery was little changed at 49.46 cents a pound.
Demand for palm oil may pick up in the months ahead of Ramadan in July, said Mallya. Consumption of cooking oils usually increase during the Muslim fasting month as communal meals boost demand.
Exports from Malaysia fell 4.3 percent to 1.31 million tons in April from a month earlier, surveyor Intertek said today. Reserves have dropped 17 percent to 2.17 million tons in March from a record 2.63 million tons in December, according to Malaysian Palm Oil Board data.
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