Soybeans Gain on Demand for Alternative as Palm-Oil Prices Rise

Aug. 5 (Bloomberg) -- Soybeans rose for a fifth session on speculation that demand for the crop will improve as food makers seek a cheaper alternative to palm oil, which jumped to a six- week high in Malaysia.

Palm-oil futures climbed 11 percent in the past five sessions, the longest rally since Feb. 10, as higher energy prices boosted its appeal as a source of biofuel. The dollar’s 3.6 percent slide against a basket of six major currencies since July 3 is making U.S. commodities cheaper for buyers abroad. The U.S. is the world’s biggest soybean grower and exporter.

“End-users are getting coverage ahead of what may be a steep decline in production in Malaysia and India,” said Mike Zuzolo, the president of Global Commodity Analytics in Lafayette, Indiana. “Demand for beans is very high around the world.”

Soybean futures for November delivery rose 13.5 cents, or 1.3 percent, to $10.45 a bushel on the Chicago Board of Trade. The most-active contract, up 14 percent since July 29, has climbed 6.6 percent this year on increased demand and lower stockpiles.

Palm-oil futures for October delivery touched 2,357 ringgit ($674) a ton on the Malaysia Derivatives Exchange, the highest since June 18, before closing at 2,335 ringgit, up 1.3 percent.

Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, followed by soybeans at $27.4 billion, government figures show. The U.S. is the world’s largest exporter of both.