Palm oil advanced after an increase in crude oil and soybean oil boosted the attraction of the tropical commodity as an alternative fuel.
The April-delivery contract gained as much as 0.7 percent to 2,462 ringgit ($720) on the Malaysia Derivatives Exchange and ended at 2,452 ringgit a ton, the highest close since Jan. 25.
Crude oil climbed for a second day on speculation reviving demand in the U.S., the biggest energy consumer, is causing fuel supplies to drop. The commodity advanced the most in four weeks yesterday after U.S. manufacturing increased at the fastest pace since 2004. Oil for March delivery rose as much as 1.4 percent to $75.44 a barrel in New York. Soybeans for March delivery in Chicago gained as much as 0.7 percent to $9.16 a bushel.
“Palm oil got a trigger from a continued recovery in crude oil prices,” said Harish Galipelli, vice president at JRG Wealth Management Ltd.
Palm oil exports from Malaysia, the second-biggest producer, grew 28 percent in January from the previous month, Intertek, an independent market surveyor, said yesterday. A total of 1.5 million tons were tracked in January, it said.
Soybean buyers in China, the biggest importer, are unlikely to default on their contracts, an analyst at Jilin Grain Group Co. said. Most crushers have hedged their shipments on the futures markets and pre-sold the end-products, said Chen Baomin, Dalian-based analyst at Jilin Grain Group. Attempts to change contracts won’t easily succeed as crushing in China is now dominated by large, well-established companies, he said.
Soybean Surplus
Chinese buyers may be tempted to default on soybean shipments from the U.S. in favor of cheaper Latin American crops, Emmanuel Jayet, head of agricultural research at Societe Generale SA, wrote in a report yesterday. This may cause the oilseed to fall “rapidly” below $7 a bushel, he said.
Global soybean output in the year started Oct. 1 will be a record 253.4 million tons, higher than the previous 250.3 million forecast, the U.S. Department of Agriculture has said.
Palm oil generally is “under pressure because of soybeans,” said Alvin Tai, an analyst at OSK Research Sdn. “Soybeans are under pressure from the South American crop, which is expected to be bumper.”
Vegetable oil imports by India, the biggest consumer after China, will drop this month and next as stockpiles at ports have climbed to about 800,000 tons, compared with 600,000 tons, a level deemed normal, Govindlal G. Patel, director of Dipak Enterprise, said in a phone interview today.
Less Buying
Purchases in January likely dropped to 750,000 tons to 800,000 tons from 856,690 tons in the year-ago month, he said.
Godrej Agrovet Ltd., India’s biggest palm oil producer, plans to triple domestic output as demand for cooking oil surges, Managing Director B.S. Yadav said in an interview in Mumbai yesterday. Godrej will invest 1 billion rupees ($22 million) in the next five years building refineries to process production from more than 100,000 hectares (247,000 acres) of palm trees. That may boost the Mumbai-based company’s output to more than 75,000 tons, he said.
Demand for vegetable oil in China may wane after peaking in the Spring Festival in the second-half of February, Guoxin Futures Co. said in a report yesterday.
Palm oil advanced after an increase in crude oil and soybean oil boosted the attraction of the tropical commodity as an alternative fuel.
The April-delivery contract gained as much as 0.7 percent to 2,462 ringgit ($720) on the Malaysia Derivatives Exchange and ended at 2,452 ringgit a ton, the highest close since Jan. 25.
Crude oil climbed for a second day on speculation reviving demand in the U.S., the biggest energy consumer, is causing fuel supplies to drop. The commodity advanced the most in four weeks yesterday after U.S. manufacturing increased at the fastest pace since 2004. Oil for March delivery rose as much as 1.4 percent to $75.44 a barrel in New York. Soybeans for March delivery in Chicago gained as much as 0.7 percent to $9.16 a bushel.
“Palm oil got a trigger from a continued recovery in crude oil prices,” said Harish Galipelli, vice president at JRG Wealth Management Ltd.
Palm oil exports from Malaysia, the second-biggest producer, grew 28 percent in January from the previous month, Intertek, an independent market surveyor, said yesterday. A total of 1.5 million tons were tracked in January, it said.
Soybean buyers in China, the biggest importer, are unlikely to default on their contracts, an analyst at Jilin Grain Group Co. said. Most crushers have hedged their shipments on the futures markets and pre-sold the end-products, said Chen Baomin, Dalian-based analyst at Jilin Grain Group. Attempts to change contracts won’t easily succeed as crushing in China is now dominated by large, well-established companies, he said.
Soybean Surplus
Chinese buyers may be tempted to default on soybean shipments from the U.S. in favor of cheaper Latin American crops, Emmanuel Jayet, head of agricultural research at Societe Generale SA, wrote in a report yesterday. This may cause the oilseed to fall “rapidly” below $7 a bushel, he said.
Global soybean output in the year started Oct. 1 will be a record 253.4 million tons, higher than the previous 250.3 million forecast, the U.S. Department of Agriculture has said.
Palm oil generally is “under pressure because of soybeans,” said Alvin Tai, an analyst at OSK Research Sdn. “Soybeans are under pressure from the South American crop, which is expected to be bumper.”
Vegetable oil imports by India, the biggest consumer after China, will drop this month and next as stockpiles at ports have climbed to about 800,000 tons, compared with 600,000 tons, a level deemed normal, Govindlal G. Patel, director of Dipak Enterprise, said in a phone interview today.
Less Buying
Purchases in January likely dropped to 750,000 tons to 800,000 tons from 856,690 tons in the year-ago month, he said.
Godrej Agrovet Ltd., India’s biggest palm oil producer, plans to triple domestic output as demand for cooking oil surges, Managing Director B.S. Yadav said in an interview in Mumbai yesterday. Godrej will invest 1 billion rupees ($22 million) in the next five years building refineries to process production from more than 100,000 hectares (247,000 acres) of palm trees. That may boost the Mumbai-based company’s output to more than 75,000 tons, he said.
Demand for vegetable oil in China may wane after peaking in the Spring Festival in the second-half of February, Guoxin Futures Co. said in a report yesterday.
