Palm oil gained, trimming a third monthly decline, amid a rally in soybeans on speculation that global oilseed demand will increase.
The contract for July delivery advanced 0.6 percent to close at 2,286 ringgit ($751) a metric ton on the Bursa Malaysia Derivatives. Futures declined 3.9 percent in April.
Soybeans, which can be crushed to make soybean oil, rallied to a one-month high in Chicago today on speculation demand for U.S. supplies will rise. Palm oil will make up 90 percent of the projected global demand growth for edible oils in the 2012-2013 season because of insufficient supplies of soybean oil, sunflower oil, rapeseed oil and olive oil, according to researcher Oil World.
“Soybeans will continue to remain volatile and probably that is where palm oil will take further cues,” said Prathamesh Mallya, an analyst at AnandRathi Commodities Ltd. in Mumbai. Buyers in China may increase purchases of the oilseed from U.S. exporters, he said.
Soybeans for July delivery advanced as much as 1.1 percent to $14.2375 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 49.56 cents a pound.
Palm oil exports from Malaysia, the world’s biggest producer after Indonesia, fell 4.3 percent to 1.31 million tons in April from a month earlier, surveyor Intertek said today.
Demand for palm may pick up in the months before Ramadan in July, said Mallya. Consumption of cooking oils usually increases during the Muslim fasting month as communal meals boost demand.