(May 11): Malaysian palm oil climbed 0.7% on Wednesday to its highest in almost three weeks, with prices rising for four out of six sessions on strong demand and a rally in soybeans.
Chicago soybeans are trading near a 21-month high, after the U.S. government forecast lower world supplies as adverse weather cuts South American yields and demand from top importer China continues to rise.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.7% at 2,680 ringgit (US$665) per tonne at the evening close.
It earlier reached an intraday high of 2,717 ringgit, its strongest since April 22. Traded volumes were 63,496 lots of 25 tonnes each at the end of the evening session.
"Palm oil exports are very good and we expect further reductions in Malaysian stocks," one Kuala Lumpur-based trader said. "There are weather issues in Argentina which are reducing supplies of soybeans."
Malaysian data on Tuesday showed a 4.5% decline in local stockpiles in April, as output growth was less than expected. Production rose 6.7% from March to 1.30 million tonnes, compared with a 13.2% jump to 1.69 million tonnes in April last year.
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