Palm oil advanced for the first day in five, rebounding from the lowest close in eight months, after the condition of the US soybean crop deteriorated, boosting prices of the oilseed that's crushed to make a rival product.
The September-delivery contract gained 0.7 per cent to 3,063 ringgit (Dh3,600) per metric ton on the Malaysia Derivatives Exchange. Futures closed at 3,042 ringgit on Monday, the lowest level since October 27.
The condition of the US crop worsened last week as rain slowed plant development and delayed applications of fertilisers and herbicides. An estimated 65 per cent of the soybeans were in good or excellent condition as of July 26, compared with 68 per cent a week earlier and 67 per cent a year earlier, the US Department of Agriculture said in a report on Monday.
"Three per cent of the crop has been damaged during the week due to the weather," Vimala Reddy, an analyst at Karvy Comtrade, said from the Indian city of Hyderabad. "Currently, the weather conditions are actually recovering across the US and, if this prevails in the next 10 to 15 days, it will help the crop to recover very fast."
Planting was 97 per cent completed, compared with 94 per cent a week earlier and 96 per cent, on average, for the past five years, the USDA said.
Some areas from North Dakota to southern Illinois had more than twice the normal rainfall in the past week, data from the High Plains Regional Climate Center show.
"This news will lead to some rebound" in palm oil after the decline of the past four days, said Donny Khor, senior vice-president for futures and options at OSK Investment Bank. The price shed 5.6 per cent in the period.