Palm oil advanced, poised for a weekly gain, on speculation that demand for the world’s most used cooking oil may increase after soybeans, crushed to make a competing product, rallied to a two-week high.
The contract for delivery in May advanced as much as 0.8 percent to 2,555 ringgit ($824) a metric ton on the Malaysia Derivatives Exchange, and ended the morning session at 2,551 ringgit. Futures are set to gain 2.7 percent this week.
Argentina’s 2012-2013 soybean crop output forecast will be trimmed to about 49 million tons, or 48 million, from a December forecast of 53 million by the Rosario Grains Exchange as this week’s rain didn’t offset damage from the previous month’s drought, according to a person with direct knowledge of the situation yesterday. Soybeans in Chicago today rallied for a fifth day to the highest level since Feb. 8.
“The market is focusing on Argentina although it is aware that it’s going to be a big crop.” said Gnanasekar Thiagarajan, a director at Mumbai-based Commtrendz Risk Management Services Pvt. “This will be a short-lived rally.”
Soybeans for May delivery climbed as much as 1.2 percent to $14.88 a bushel on the Chicago Board of Trade. Soybean oil for May delivery advanced 0.6 percent to 51.98 cents a pound. The cooking oil’s premium to palm oil was at $322.52 a ton today. The two are the most consumed edible oils in the world.
Refined palm oil for delivery in September rose 0.5 percent to 7,078 yuan ($1,134) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month increased 1.3percent to 8,738 yuan a ton.
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