Crude palm oil futures traded on Bursa Malaysia Derivatives climbed for a second day on concern that dry weather in the main soybean growing regions in the U.S. could damage the soybean crop, lowering global supplies and boosting demand for the tropical vegetable oil. As optimism on commodity market has faded, dry weather has come into focus as unfavorable weather had damaged soybean crop quality.
The September-delivery contract advanced 1.7 percent to 2,948 ringgit a metric ton, the highest price at close since June 13. Futures contracts have lost 7.2 percent this year. Traded volumes stood at 39,877 lots.
The market may see another day of gains today as dry weather deteriorated soybean crop conditions. Palm oil exports are expected to rise before the Muslim month of Ramadan when consumption of food staples and cooking oils climbs. Resistance may see at RM2,970 and RM3,000 while support is at RM2,820 and RM2,890.
Soybean (Bloomberg)
U.S. soybean stockpiles are seen smaller than previously estimated because of strengthening demand for the country’s exports and decreasing supplies in South America, Oil World said. U.S. inventories at the end of the marketing year on Aug. 31 may be 4.2 million metric tons, down from a forecast three weeks ago of 4.6 million tons.
U.S. soybean crushing and net exports jumped 32 percent in May from a year earlier, Oil World said. Total stockpiles in South America’s five largest producers slid to 72.36 million tons on June 1, 25 percent less than a year earlier. Soybeans have climbed about 10 percent this year on the Chicago Board of Trade as drought cut South American output and Chinese demand increased.
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