Malaysian palm oil hit a 15-month high and other global vegetable oil markets rallied on Monday as traders bet on top buyers China and India snapping up more cargoes in the months to come. An industry conference in Mumbai forecast India will buy a record amount of vegetable oil in the new marketing year and China's Ministry of Commerce revised up its estimate for September soy imports.
The hunger for vegetable oils and grains gets fuelled as US dollar weakens amid concerns that erratic weather across the globe will curb production of soybeans in the Americas and China as well as Canadian canola. Malaysian palm oil jumped 2 percent by the midday break and US October soyaoil gained 0.7 percent following the rallies in Chinese markets earlier in the day.
China's most active May 2011 palm olein futures jumped 3.4 percent and May 2011 soybean oil soared 3.3 percent by 0539 GMT as traders adjusted their positions after last week's long holiday to reflect bullish fundamentals.
"China will consume more soyaoil in the winter and less palm oil. India is the wild card," a trader in Malaysian brokerage said. Additionally, the Globoil conference last week was relatively bullish. Industry analysts at the Globoil forecast palm oil will rally into the next year after slowing a little in the short term due to higher production.
But cargo surveyors have reported up to 17 percent increase in Malaysia's 1-25 palm oil exports, signalling that demand could outpace domestic production comfortably this year. The soyaoil market continued to draw support from prospects of lower US soybean seedings in 2011, as forecast by analytics firm Informa Economics last week, and from worries about early planting weather in South American soy areas.
"China rose on a technical correction as overseas markets rose more than 7 percent when China's financial markets were closed," said a trader in the country's major soy producing province of Heilongjiang. "Prices are likely to trade between 8,800-9,000 yuan."