Palm oil futures advanced for a second day and were poised for the first weekly gain in three after rival soybean oil climbed on expectations that the U.S. soybean harvest may not reach a record. The November-delivery contract rose as much as 0.9 percent to 2,566 ringgit ($821) a metric ton on the Malaysia Derivatives Exchange. Futures were trading at 2,556 ringgit at 12:30 p.m. local time midday break in Kuala Lumpur. “There is positive news on soybeans in the market and that is helping palm oil prices,” Ryan Long, a dealer at OSK Investment Bank Bhd. in Kuala Lumpur, said by telephone today. The U.S. soybean harvest may not reach a record this year, said John Wray, director of the United Soybean Board, an association of soybean farmers. Floods and dry weather affected different growing regions in the U.S., said Wray in a speech at a conference organized by Shanghai JC Intelligence Co. in Tianjin, China today. Soybean imports by China may advance as much as 5.8 percent in the 2010-2011 year as growing crushing and storage capacity spurs purchases, said Frank Zhou, general manager, soybean trading, at Cargill Investment (China) Ltd. Inbound shipments may increase to 55 million tons from at least 52 million tons in the previous year, he said today at the same conference in Tianjin. He said he was expressing a personal view. Soybean futures for November delivery rose as much as 0.9 percent to $10.185 a bushel in Chicago. December-delivery soybean oil climbed as high as 0.8 percent to 40.51 cents a pound in Chicago. Palm and soybean oils are direct substitutes. Palm oil stored at ports in China dropped for a third week, said Grain.gov.cn, citing its survey. Inventory declined by 340,000 tons since July to about 400,000 tons, the portal said in e-mailed report today. Grain.gov.cn is owned by the China National Grain & Oils Information Center. “Perhaps there is also pre-weekend short-covering in the market,” Long said. To contact the reporters on this story: Pratik Parija in New Delhi at pparija@bloomberg.net

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