Palm oil advances most in week as rains delay US soybean crop

by **Cals** Tue 08 Oct 2013, 01:25

Business & Markets 2013

Written by Bloomberg

Monday, 07 October 2013 19:02

(Oct. 7): Palm oil climbed the most in more than a week on speculation that rains in the U.S. may delay harvesting of soybeans, crushed to produce a substitute oil.

Palm for December delivery gained 0.6 percent to 2,318 ringgit ($727) a metric ton on the Bursa Malaysia Derivatives, the biggest gain at close for the most-active contract since Sept. 27. Palm for physical delivery in October was at 2,320 ringgit today, data compiled by Bloomberg show.

Soybean futures in Chicago jumped to the highest level in a week on speculation harvest may be delayed. Rain in the east of the U.S. over the weekend may be disruptive to harvesting and areas in the north-central region may be affected by rain later this week, forecaster DTN said on Oct. 4.

“The weather in the U.S. has raised concerns that the crop may not be as much as expected earlier,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. in Kuala Lumpur. “Stockpiles in Malaysia are expected to have climbed last month, but as long as it does not break the 2-million tons mark, the market should be relieved.”

Inventories probably expanded 13 percent to 1.89 million tons last month, the highest since April, according to a Bloomberg News survey. Output climbed 15 percent to 2 million tons, matching the record output in September 2012, the survey showed, while exports gained 2 percent to 1.55 million tons. The Malaysian Palm Oil Board will publish the data on Oct. 10.

Soybeans for delivery in November was little changed at $12.9375 a bushel on the Chicago Board of Trade after rising as much as 0.8 percent to the highest level since Sept. 30. Soybean oil for December delivery slid 0.2 percent to 40.17 cents a pound.