July 27 (Bloomberg) -- Palm oil advanced, paring a third weekly decline, on speculation that central banks will act to spur economic growth, increasing demand for commodities.
The October-delivery contract climbed 1.6 percent to close at 2,927 ringgit ($926) a metric ton on the Malaysia Derivatives Exchange. Futures lost 3.8 percent this week on speculation that rain in the U.S. will help soybean crops damaged by the worst drought in more than 50 years.
European Central Bank President Mario Draghi pledged to preserve the euro, suggesting policy makers may intervene in bond markets. Le Monde reported that the European Central Bank is preparing to buy securities of the region’s most indebted economies. Data today may show the U.S. economy grew at the slowest pace in a year, while a decline in Japanese consumer prices spurred speculation the Bank of Japan will add stimulus.
“The ECB is willing to help and this has boosted confidence,” Donny Khor, senior vice president for futures and options at OSK Holdings Bhd., said by phone in Kuala Lumpur. “This may spark some short-covering.” Short-covering refers to investors reversing bets on declining prices.
Palm oil exports from Indonesia, the largest producer, declined 17 percent to 1.14 million tons in June from 1.37 million tons a month earlier as exporters delayed shipments to avoid paying a higher tax rate, according to the Indonesia Palm Oil Association. That was lower than the median estimate of 1.5 million tons in a Bloomberg survey published last month.
The duty on crude palm oil exports was cut by Indonesia to 15 percent in July from 19.5 percent in June. Indonesia will keep the duty on exports of crude palm oil unchanged at 15 percent in August, Deddy Saleh, director general of foreign trade at the Trade Ministry said today.
Thailand plans to import 30,000 tons of crude palm oil by August to replenish low domestic stockpiles, Apichart Jongskul, secretary-general of Office of Agricultural Economics said.
December-delivery soybean oil climbed 0.6 percent to 52.69 cents a pound on the Chicago Board of Trade. Soybeans for November-delivery advanced 1.5 percent to $15.9125 a bushel.
Palm oil for January delivery gained 1 percent to close at 7,768 ($1,210) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month rose 0.6 percent to 9,402 yuan a ton.
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