Palm oil rallied to the highest level in more than 14 months on speculation that rains in Malaysia, the world’s second-largest producer, may hamper production of the tropical oil used in everything from food to fuel.
The contract for February delivery climbed 1 percent to 2,667 ringgit ($825) a metric ton on the Bursa Malaysia Derivatives, the highest level at close for the most-active futures since Sept. 25, 2012. Futures advanced 0.5 percent this week, the fourth straight week of gains.
Malaysian Meteorological Department warned of heavy rains and thunderstorms in Johor, Pahang and Terengganu states today and forecast isolated thunderstorms over Johor, Sarawak and Sabah, the biggest palm oil producing states, for the next seven days. The monsoon in Malaysia usually begins in November.
“Production will be disturbed because of the heavy rains and December production may be less compared with the previous month,” said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. “Soybean oil prices have also risen because of the biodiesel mandate in Argentina and Brazil. Demand for the oils will go up.”
Soybean oil for January delivery advanced 0.7 percent to 40.89 cents a pound on the Chicago Board of Trade. Soybeans slid 0.4 percent to $13.2275 a bushel.
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