Oct. 14 (Bloomberg) -- Palm oil advanced to the highest level in more than two weeks after soybeans gained on speculation that China may boost imports to meet rising demand.
The December-delivery contract gained 2.2 percent to 2,906 ringgit ($929) a metric ton on the Malaysia Derivatives Exchange, the highest level at close since Sept. 28. Futures advanced 4.8 percent this week, the first in four weeks.
“Palm oil is taking cues from the gains in soybean because of demand by end users in China,” Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore today. “China will be stepping up purchases due to positive crush margins and strong demand from the livestock industry.”
China’s soybean imports rose 4 percent to a record 52.3 million tons in the year ended Sept. 30, according to customs data. U.S. soybeans inspected for export more than doubled to 23.4 million bushels in the week ended Oct. 6 from a week earlier, with two-thirds set for China, the Department of Agriculture said this week.
Soybean futures for November delivery climbed as much as 0.7 percent to $12.66 a bushel, the highest level since Sept. 27, and traded at $12.65 on the Chicago Board of Trade.
Palm oil futures may climb to 3,150 ringgit a ton in the next two months, Ravi Chandra, vice president at Hyderabad, India-based TransGraph Consulting Pvt., said yesterday. Palm oil last traded above that level in July.
Refined, bleached, and deodorized palm oil imports by India, the largest buyer, rose 54 percent to 143,296 tons in September, while crude palm oil purchases declined 6.7 percent to 548,904 tons, the Solvent Extractors’ Association of India said today.
“The huge discount to soy will continue to attract buying interest on any major falls,” Gnanasekar Thiagarajan, a director at Commtrendz Research Management Services Pvt. in Mumbai, said in a report today.
Soybean oil’s premium over palm oil was $236.8 a ton today, compared with an average of $166.31 this year. It touched $289.96 a ton on Aug. 31, the highest since November 2008, according to Bloomberg data.
Soybean oil for December climbed as much as 1.2 percent to 53.09 cents per pound. Palm and soybean oils are substitutes in food and fuel uses.
Palm oil for delivery in May climbed 0.5 percent to close at 8,024 yuan ($1,258) per ton on the Dalian Commodity Exchange and soybean oil for delivery in the same month advanced 0.6 percent to end at 9,376 yuan a ton.
--With assistance from Pratik Parija in New Delhi. Editor: Thomas Kutty Abraham
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