(Corrects to producer from exporter in first paragraph.)
Palm oil rallied for a second day to the highest level in more than a year on concern that farmers in the U.S., the world’s biggest soybean producer, will seed less of the oilseed this year, paring cooking oil supplies.
June-delivery palm oil gained as much as 0.9 percent to 3,566 ringgit ($1,170) per ton on the Malaysia Derivatives Exchange, the highest price for the most-active contract since March 9, 2011, and ended the morning session at 3,550 ringgit in Kuala Lumpur.
Farmers will sow 73.902 million acres with soybeans this year, down 1.4 percent from 2011 and the lowest in five years, the U.S. Department of Agriculture said March 30 after surveying growers. The forecast was about 1.5 million acres below the average estimate of analysts and almost 1.1 million less than a year earlier. Soybeans can be crushed to make soybean oil, which competes with palm oil for use in food and fuel.
Palm oil “prices are tracking soybeans,” James Ratnam, an analyst at TA Securities Holdings Bhd., said by phone from Kuala Lumpur. “Further upside would come if there are any surprise shocks from the soybean side.”
Soybeans for May delivery were little changed at $14.1975 a bushel on the Chicago Board of Trade. Futures reached $14.3375 yesterday, the highest for the most-active contract since Sept. 7. Prices surged 16 percent in the first quarter, the most since the end of 2010, after dry weather reduced output in South America. Soybean oil for delivery in May was also little changed at 56.18 cents per pound after closing 1.9 higher yesterday.
Demand for palm oil was “quite strong” as shown by the export data from Malaysia, said Ratnam.
Exports from Malaysia, the second-largest producer, increased 3.5 percent to 1.21 million tons in March from a month earlier, surveyor Societe Generale de Surveillance said yesterday. Shipments rose 4.8 percent to 1.23 million tons, surveyor Intertek (ITSPALM) said March 31.
Markets in China are closed for a holiday today.
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