KUALA LUMPUR, Jan 22: Malaysian palm oil futures rose to their highest in more than two weeks on Tuesday, tracking gains in competing soyoil as dry weather in key South American soy-producing regions sparked concerns about edible oil supply as global demand recovers.

Dryness in parts of Argentina and Brazil could hurt South America’s soybean yields and turn buyers towards palm oil, which is currently trading at a discount of more than $300 a ton.

Malaysian palm oil exports fell 19 per cent in the first twenty days of January, improving fractionally from a steeper drop earlier in the month and raising hopes that demand would pick up and cut record high stockpiles in the world’s No.2 producer.

“Exports are improving slightly — it’s still not so good, but it should be improving,” said a trader with a foreign commodities brokerage in Kuala Lumpur. “The market has broken the resistance level of 2,445-2,450 ringgit of the third month benchmark. Technically the market looks more supportive,” he added.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange rose to 2,474 ringgit per ton.

Total traded volume stood at 35,955 lots of 25 tons each, slightly higher than the usual 25,000 lots.

Technical analysis shows palm oil is expected to rise towards 2,486 ringgit per ton, as it has cleared resistance at 2,449 ringgit, said Reuters market analyst Wang Tao.

In competing vegetable oil markets, the US soyoil for March delivery rose 1.5 per cent to a near three-month high late on Tuesday, underpinned by dry weather that sparked concerns about South America’s soybean crop, which is forecast to hit to record highs this year.—Reuters