Malaysian crude palm oil futures hit their highest in almost three weeks on Wednesday, as investors bet on higher demand for palm oil after hot and dry US weather threatened to curb the soya crop available for crushing into edible oil. A 15-percent jump in Malaysian palm oil exports for the June 1-20 period from a month ago confirmed a shift of orders to the tropical oil and last-minute buying ahead of the Ramazan that starts in late July.
Palm oil prices crossed above the 3,000-ringgit mark for the first time since June 11, signalling traders were less cautious after the Greece elections helped ease concerns over the euro zone debt crisis. "Demand is expected to grow as we are moving into the Ramazan month," said a trader with a foreign commodities brokerage in Malaysia.
Benchmark September palm oil futures on the Bursa Malaysia Derivatives Exchange jumped 3.2 percent to close at 3,041 ringgit ($964) per tonne, after going as high as 3,058 ringgit, a level unseen since June 1. Traded volumes stood at 52,086 lots of 25 tonnes each, more than double the usual 25,000 lots. On the technicals front, palm oil will test resistance at 3,024 ringgit, a break above which will open the way towards 3,140 ringgit, said Reuters market analyst Wang Tao.
Malaysian palm oil exports grew to 991,917 tonnes in the first 20 days of the month, said cargo surveyor Intertek Testing Services. Another cargo surveyor Societe Generale de Surveillance also reported a 15 percent increase in exports to 996,662 tonnes for the same period.
Dry weather in the United States is in focus as the US Department of Agriculture (USDA) said unfavourable weather had damaged soyabean crop quality. A lower soyabean crop could lead to a smaller supply of soyabean oil, shifting demand to the cheaper refined palm oil. In other vegetable oil markets, US soyaoil for July delivery gained more than 1 percent. The most active January 2013 soyaoil contract on the Dalian commodity exchange inched up 2 percent, touching a one-month high on tighter US soyabean supply.
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