Palm oil advanced for a third day to the highest level in three weeks on speculation that rains in the U.S. may delay the harvest of soybean crop, crushed to make an alternative oil used in food and fuel.
Palm for delivery in December gained 1.4 percent to 2,351 ringgit ($736) a metric ton on the Bursa Malaysia Derivatives, the highest price at close for the most-active contract since Sept. 17. Palm for physical delivery in October was at 2,340 ringgit today, data compiled by Bloomberg show.
“Palm oil is being supported by the gains in soybean oil, which is a substitute for palm,” said Tan Chee Tat, an analyst at Phillip Futures Pte. in Singapore. “We are seeing some bargain hunting as the current prices are still deemed to be attractive.”
Soybean futures in Chicago increased for the fifth day, the longest rally in four months. Rain last week in the U.S. Midwest will likely delay harvests early this week, forecaster DTN said. The contract for delivery in November advanced 0.6 percent to $13.0375 a bushel on the Chicago Board of Trade, while soybean oil for December delivery gained 0.7 percent to 40.19 cents a pound.
Refined palm oil for January delivery surged as much as 2.2 percent to 5,500 yuan ($898) a ton on the Dalian Commodity Exchange and soybean oil advanced 0.6 percent to end at 7,000 yuan. The market resumed trading after a week-long holiday.