Palm oil advanced for the first time in three days, rebounding from a one-week low, on optimism that demand in China will increase as inventories decline.
The contract for delivery in June gained 0.7 percent to 2,455 ringgit ($792) a metric ton on the Malaysia Derivatives Exchange at the midday break in Kuala Lumpur. Most-active prices touched 2,426 ringgit yesterday, the lowest level since March 20.
Demand in China is returning as warmer weather boosts seasonal consumption, Grain.gov.cn said in a report today. Inventories held at major ports dropped 30,000 tons to 1.25 million tons this week, according to the state-owned researcher. The tropical oil clouds in cooler temperatures.
“China will need to stock up again after inventory declines,” Ryan Long, vice president of futures and options at OSK Investment Bank Bhd., said from Kuala Lumpur. Palm also rose on so-called spill-over strength from the energy market, he said.
Brent crude gained as much as 1.3 percent to $109.59 a barrel yesterday, the highest level since March 18. Palm oil is used in biofuels.
Soybean oil for May delivery dropped 0.2 percent to 50.7 cents a pound on the Chicago Board of Trade, while soybeans for May declined 0.2 percent at $14.455 a bushel.
Refined palm oil for September delivery gained 0.3 percent to 6,378 yuan ($1,027) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month added 0.2 percent to 8,088 yuan a ton.
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