June 21, 2010
By Claire Leow

June 21 (Bloomberg) — Palm oil futures gained for a fourth day, rising as much as 0.7 percent as crude oil and soybeans advanced and exports from Malaysia expanded.

Palm oil for September delivery on the Malaysia Derivatives Exchange climbed as high as 2,417 ringgit ($758) a metric ton before pausing at 2,405 ringgit at the 12:30 p.m. trading break.

Crude oil in New York for July delivery jumped as much as 2 percent to $78.69 a barrel, the highest since May 6, while soybeans for November delivery in Chicago advanced for a fourth day, gaining as much as 1.3 percent to $9.43 a bushel, the highest level since June 4.

Palm oil also gained after China’s central bank signaled it would end the yuan’s two-year peg to the dollar.

“A stronger yuan would lower the cost of palm, which in international trade is calculated in dollars,” potentially lifting Chinese demand for palm oil, said Ben Santoso, a plantation analyst at DBS Vickers Securities (Singapore) Pte.

Palm oil exports from Malaysia, the second-largest producer, grew 17 percent to 906,321 metric tons in the first 20 days of June from the same period in May, independent market surveyor Intertek said today. Chinese imports jumped 57 percent to 344,600 tons, it said.

Still, at the moment “soybean crushing earns more margin than palm oil refining and consumption volume growth will hence be tilted towards soybeans/soybean oil more than palm oil,” Santoso said.

Soybean oil in Chicago for December delivery gained 0.7 percent to 39.25 cents a pound, narrowing the premium over palm oil to $112.22 a ton, according to Bloomberg data.

Ringgit Gains
The Malaysian ringgit gained a fourth day, rising as much as 1.9 percent to the dollar, the biggest gain since May 10. The currency has gained four out of the first five months this year, and is poised to extend its advance in June, according to Bloomberg data.

CME Group Inc.’s September-delivery palm oil contract, which is pegged to the Malaysian benchmark price, gained 1.7 percent to $750 a ton. That’s the biggest gain since May 27.

On the Dalian Commodity Exchange, January-delivery palm oil rose as much as 1.2 percent to 6,508 yuan ($955) a ton before pausing at 6,506 yuan at the 11:30 a.m. trading break. Dalian soybean oil advanced 1.3 percent to 7,636 yuan a ton.

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