KUALA LUMPUR: Malaysian palm oil futures jumped 5% on Wednesday, hitting a two-week high, as dry weather in the US and Canadian crop belts and reduced crop expectations in South America stoked worries over global edible oil supply.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed 202 ringgit higher, or 5.19%, to 4,093 ringgit ($992.72) a tonne, its highest closing since May 20.

The US Department of Agriculture said US farmers planted 84% of their intended soybean acreage, below the average estimate of 87% in a Reuters poll.

Soyoil prices on the Chicago Board of Trade were up 2%. Dalian's most-active soyoil contract rose 2.7%, while its palm oil contract gained 3.3%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm oil supply in Malaysia and Indonesia is also expected to be tight.

Malaysia's palm inventories likely edged lower or remained unchanged from April, and will steadily rise from June, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Refinitiv Commodities Research maintained its 2020/21 output forecast for top producer Indonesia at 46.8 million tonnes, despite a recent setback due to adverse weather conditions and lesser working days in May versus April.

Malaysia's production in 2020/21 was pegged at 18.8 million tonnes, 1% lower than Refinitiv's previous estimate.

Palm oil price gains were limited by expectations of lower domestic consumption due to a two-week lockdown, with sluggish exports in May further hurting demand prospects.

"Demand is a major concern in June, and we are witnessing greater competition from Indonesia," said Paramalingam.