Palm oil climbed for a third day to the highest level in more than a month on concern that hot, dry weather in the U.S. may have hurt crops, reducing global cooking-oil supplies.
The September-delivery contract rose 1.2 percent to close at 3,124 ringgit ($991) a metric ton on the Malaysia Derivatives Exchange, the highest price for the most-active contract since May 29. Futures have rebounded 10 percent since reaching an eight-month low of 2,838 ringgit on June 14.
About 45 percent of soybeans were rated good or excellent as of July 1, down from 53 percent last week and 66 percent a year earlier, the U.S. Department of Agriculture said yesterday. Little or no rain has fallen in most of the Great Plains and Midwest in the past week, National Weather Service data show.
“It all boils down to the weather,” said Donny Khor, senior vice president for futures and options at OSK Holdings Bhd. “As long as the weather forecasts continue to be hot and dry, or the rain may not be as much as people expect, this is likely to continue to support the markets.”
The weather will stress corn and soybeans over at least the next five to seven days, with crops in Missouri, Illinois, and Indiana at most risk, according to Telvent DTN Inc.
Soybeans for November delivery gained 1.2 percent to $14.55 a bushel on the Chicago Board of Trade. December-delivery soybean oil rose 0.8 percent to 53.46 cents per pound. Palm oil and soybean oil are used in foods and fuels.
Price gains were also due to the “good” export estimates for last month, Khor said. Malaysia’s shipments rose 4.9 percent to 1.45 million tons in June from a month earlier, Intertek said June 30. Exports gained 9.7 percent to 1.46 million tons last month, Societe Generale de Surveillance said yesterday.
Imports by China, the biggest cooking-oil user, may gain 1.5 percent to 5.8 million tons in the year to Sept. 30 from a year ago, state-owned researcher Grain.gov.cn said in an e-mailed report today.
MMTC Ltd., a state-run Indian trader, invited bids to import 22,000 tons of refined, bleached and deodorized palm olein from Malaysia or Indonesia for delivery by July 25. Bidders have until July 11 to tender, MMTC said today.
Palm oil for January delivery rose 1 percent to close at 8,176 yuan ($1,287) a ton on the Dalian Commodity Exchange. Soybean oil for delivery the same month climbed 0.8 percent to end at 9,710 yuan a ton.