Malaysian palm higher

Malaysian crude palm oil futures closed higher on Monday on hopes demand for the tropical oil would get a boost as dry weather in the United States curbs supply of competing soybean oil. Palm oil futures rose close to 4 percent last week on US weather woes, and prices sharply extended those gains on Monday on concerns that the drought could be worse than expected.
Rising exports ahead of the Muslim fasting month Ramadan that begins in end-July also added to the bullish mood. "The dry weather is lending support. Demand should also be able to stay healthy because of last-minute purchase ahead of Ramazan," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank.
"Also, there will be a summit in Europe this week. Since the general equities markets have gone down quite a bit, the market expects the Europe leaders to make some decisions to keep the economy going. These are conditions for further stimulus, and they will be beneficial for all commodities including palm oil." Benchmark September palm oil futures on the Bursa Malaysia Derivatives Exchange jumped 2.6 percent to close at 3,030 ringgit ($948) per tonne, after hitting a high of 3,059 ringgit earlier in the session.
Traded volumes stood at 26,177 lots of 25 tonnes each, slightly higher than the usual 25,000 lots. Malaysian palm oil exports grew 4.4 percent to 1.2 million tonnes in the first 25 days of the month from a month ago, said cargo surveyor Intertek Testing Services, backed by higher shipment to China, India and Pakistan.
Another cargo surveyor Societe Generale de Surveillance will delay the data release palm oil exports to Tuesday, an official said. Traders cited fears that dry weather would impede the planting of the last of the US soybean crop, including so-called "double-crop" soybeans that are planted on recently harvested winter wheat fields. Unfavourable weather that could hurt soybean crop may lead to a smaller supply of soybean oil, shifting demand to the cheaper refined palm oil.
Brent crude futures hovered around $90 a barrel on Monday as concerns about faltering global growth and Europe's debt crisis hit investor confidence. In other vegetable oil markets, US soyoil for July delivery jumped 2.1 percent, lending support to palm oil prices. The most active January 2013 soyoil contract on Dalian commodity exchange also rose 1 percent after resuming trading after a holiday. Prices touched a new high at 9,620 yuan per tonne, a level last seen since May 14.