Feb. 13 (Bloomberg) -- Palm oil climbed to the highest level this year on speculation that overseas demand may improve as dry weather hurt soybean crops in South America.
Palm oil for April delivery rose 0.8 percent to 2,655 ringgit ($799) a metric ton on Bursa Malaysia Derivatives, the highest level at close for a most-active contract since Dec. 31.
Exports from Malaysia, the second-largest grower, expanded 4 percent to 309,455 tons in the first 10 days of February from a month earlier, Intertek said Feb. 10. Rains in Brazil by the end of the week may not be enough for soil to recover adequate moisture, according to Gustavo Verardo, an analyst at Somar Meteorologia. Brazil is the largest exporter of soybeans, which can be crushed to yield a substitute oil for foods and fuel.
“There is concern that poor weather in South America may lead to lowering of production estimates of soybeans and this is helping prices of palm oil,” Ivy Ng, an analyst at CIMB Investment Bank Bhd., said by phone from Kuala Lumpur. “Exports from Malaysia should improve as China has come back from the holidays and they will look to replenish some stockpiles.”
China was closed for the week-long Lunar New Year holidays from Jan. 31 to Feb. 6.
Soybeans for delivery in May climbed 0.6 percent to $13.17 a bushel on the Chicago Board of Trade. The March-delivery soybean oil contract rose 0.3 percent to 39.09 cents a pound, strengthening for a fourth day.
Refined palm oil for May delivery advanced 0.8 percent to end at 5,932 yuan ($978) a ton on the Dalian Commodity Exchange. Soybean oil rose 0.5 percent to close at 6,678 yuan.
--Editor: Thomas Kutty Abraham