Palm oil advanced by the most in eight months on concern that the soybean crop in the U.S., the largest grower of the oilseed that’s crushed to make an alternative oil, may be smaller-than-forecast on dry weather.
The contract for November delivery climbed as much as 3.6 percent to 2,451 ringgit ($743) a metric ton on the Bursa Malaysia Derivatives, the biggest gain for the most-active futures since Dec. 21, and traded at 2,440 ringgit at 11:43 a.m. in Kuala Lumpur. Prices rose 2.5 percent last week after a 4.6 percent advance in the previous five-day period.
Soybean output in the U.S. may be 3.158 billion bushels after planting delays and unusually cool, dry weather stunted growth, according to the Professional Farmers of America. Hot, mostly dry weather for most of the Midwest in the next seven to 10 days will put added stress on some crops, DTN said Aug. 23. Exports from Malaysia, the second-largest producer, climbed 7.1 percent to 1.16 million tons in the first 25 days of this month from the same period in July, surveyor Intertek said Aug. 20.
“August and September is a very critical period for the soybean crop, so dry weather at this stage will be very bad for the yields, for the maturity and production,” said Chandran Sinnasamy, head of trading at LT International Futures Sdn. “Some anticipation is there that demand could shift to palm oil but it is too early to say. Palm oil exports from Malaysia may be 5 percent higher this month from a month ago.”
Soybean oil for delivery in December climbed as much as 4 percent to 44.7 cents a pound on the Chicago Board of Trade, and traded at 44.62 cents. Soybeans for November delivery rose as much as 4.6 percent to $13.8925 a bushel and were at $13.86. That’s the highest since June for the most-active contract.
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