Palm Oil Heads for Weekly Gain as Soybeans Rally on Crop Concern
Posted by Labels: Trader's highlightFeb. 22 (Bloomberg) -- Palm oil advanced, poised for aweekly gain, on speculation that demand for the world’s mostused cooking oil may increase after soybeans, crushed to make acompeting product, rallied to a two-week high.
The contract for delivery in May advanced as much as 0.8percent to 2,555 ringgit ($824) a metric ton on the MalaysiaDerivatives Exchange, and ended the morning session at 2,551ringgit. Futures are set to gain 2.7 percent this week.
Argentina’s 2012-2013 soybean crop output forecast will betrimmed to about 49 million tons, or 48 million, from a Decemberforecast of 53 million by the Rosario Grains Exchange as thisweek’s rain didn’t offset damage from the previous month’sdrought, according to a person with direct knowledge of thesituation yesterday.
Soybeans in Chicago today rallied for afifth day to the highest level since Feb. 8.“The market is focusing on Argentina although it is awarethat it’s going to be a big crop.” said Gnanasekar Thiagarajan,a director at Mumbai-based Commtrendz Risk Management ServicesPvt. “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 percentto 7,078 yuan ($1,134) a ton on the Dalian Commodity Exchange.Soybean oil for delivery in the same month increased 1.3percentto 8,738 yuan a ton.
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