Posted by Alami Group at June 16, 2023, 6:33 a.m.

VEGOILS-Palm oil rallies over 6% on concerns over hot, dry weather

KUALA LUMPUR, June 16 (Reuters) - Malaysian palm oil futures soared more than 6% on Friday as dry weather curbed prospects of palm and U.S soybean production, setting the contract up for a sharp weekly jump.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange gained 216 ringgit, or 6.13%, to 3,723 ringgit ($806.54) a metric ton during early trade.

For the week, palm has risen 10.5% so far.

FUNDAMENTALS
Palm oil estates in Sabah, Malaysia's largest producing state of the commodity, are experiencing water stress from early signs of El Nino, cutting yields and exacerbating the impact of under-fertilising and labour shortages seen over the past three years.

A stretch of dry weather following planting season has stressed crops across the U.S. Midwest, raising concerns that the forecasted record corn and soybean harvest will fall below expectations.

Exports of Malaysian palm oil products for June 1-15 fell 16.6% from the same week in May, cargo surveyor Intertek Testing Services said. Another cargo surveyor AmSpec Agri Malaysia said exports fell 16.4%.

Dalian's most-active soyoil contract DBYcv1 jumped 4.5%, while its palm oil contract DCPcv1 gained 5.4%. Soyoil prices on the Chicago Board of Trade BOcv1 rose 1.1% following a 4.4% overnight surge.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

MARKET NEWS
Asian shares rose to a near four-month high on Friday as resilient U.S. economic data stoked expectations that the Federal Reserve is near the end of its rate-hike campaign, with investor focus switching to the Bank of Japan's policy meeting.