SF: Palm Oil Gains as Dollar Drop Fuels Global Commodities Rally
Oct. 7 (Bloomberg) -- Palm oil had the biggest jump in two weeks as some investors bought commodities as a hedge against a weak dollar.
The December-delivery contract added 2.1 percent to 2,786 ringgit ($901) a metric ton on the Malaysia Derivatives Exchange. Futures touched 2,788 ringgit in intraday trading, the highest level since May 2009.
The dollar dropped for a third day against a basket of six major currencies, touching the lowest since Jan. 19. Spot gold reached a record for a third day and silver climbed to a 30-year high. Copper rose to near a 27-month high and tin advanced to an all-time high yesterday.
"People are chasing commodities as the dollar is weakening,' said Pawan K. Poddar, director at Poddar's Agro Trading Co. "There are no fundamental changes that warrant a continued rise in palm oil."
November-delivery soybeans in Chicago rose as much as 1.1 percent to $10.7325 a bushel, while December-delivery soybean oil gained as much as 1.1 percent to 44.28 cents a pound in Asia. Soybean and palm oils are direct substitutes.
"There could be some tightness in soybean oil supplies as Argentina isn't crushing a great deal of soybeans as China is still not buying from them," Poddar said. "That may lend some support to palm oil."
China in April banned Argentine soybean oil purchases in retaliation for anti-dumping probes on products ranging from elevators to textiles. Argentina is the top exporter of the cooking oil and China is the biggest consumer.
CME Group Inc.'s December palm oil contract, pegged to the Malaysian benchmark price, leapt as much as 3 percent to $899.75 a ton and was last at $896.25 at 5:16 p.m. The Dalian Commodity Exchange is closed to mark China's National Day celebrations and resumes trade tomorrow.
