June 16 (Bloomberg) -- Palm oil futures advanced, reversing earlier losses, as crude oil and soybeans rallied, boosting the demand outlook for the tropical commodity used as cooking oil and alternative fuel.
“If crude oil goes up, it will support the price a bit more,” Ong Chee Ting, an analyst at Maybank Investment Bank Bhd., said from Kuala Lumpur. Palm oil also typically tracks prices of soybean oil, its main substitute.
August-delivery palm oil gained as much as 1.3 percent to 2,430 ringgit ($690) a metric ton on the Malaysia Derivatives Exchange in the afternoon trading session, and was up 0.6 percent at 2,414 ringgit at 5:40 p.m. local time.
Crude oil for July delivery gained 1.1 percent to $71.36 a barrel at 5:12 p.m. Singapore time, recovering from yesterday’s losses in New York, as the dollar weakened against the euro and before a report on fuel supplies in the U.S.
Palm oil for September delivery on the Dalian Commodity Exchange in China, the largest palm oil user, closed unchanged at 6,448 yuan ($944) a ton.
Soybeans for November delivery traded in Chicago also gained, rising as much as 1.6 percent to $10.415 a bushel, lifting soybean oil as much as 2.4 percent to 37.5 cents a pound.
Soybean oil is the most-consumed edible oil after palm oil. Both are used mainly for cooking oils and increasingly in alternative energy applications. Soybean oil, which traditionally trades at a premium to palm oil, is 19 percent more expensive, up from 16 percent at the end of last week, according to Bloomberg data.
The U.S., Brazil and Argentina are the largest soybean producers. Indonesia and Malaysia are the largest palm oil producers, accounting for about 90 percent of world output.
