(Reuters) – U.S. soybeans climbed to a two-week high on Monday as severe flooding in Malaysia, the world’s second largest palm oil producer, threatens to curb global vegetable oil supplies.
Wheat was little changed after falling for the last two sessions as the market struggled with easing concerns over Russian supplies.
Severe monsoon flooding in Malaysia that has forced more than a hundred thousand people to evacuate, is likely to cause a bigger-than-expected disruption to crude palm oil production, planters and traders said.
“Soybeans are strong, there is potential to break above $10.60 a bushel in early January,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo. “Palm oil production is likely to be reduced because of the floods.”
Chicago Board of Trade January soybeans rose as much 0.7 percent to $10.55 a bushel, matching the highest since December 15. March wheat gained 0.1 percent to $6.11-1/2 a bushel after dropping 3.4 percent last week.
Floods in key palm-growing areas would hinder harvesting, transportation and crushing of fresh palm fruits, leading to tighter supplies of the world’s most traded vegetable oil in December and early 2015.
Russia, the world’s fourth largest wheat exporter, introduced informal grain export controls last week to try and cool domestic wheat prices as exports hit record levels thanks to the slump in the rouble.
Russia said it had introduced grain export duties of no less than 35 euros per tonne, starting from Feb. 1, to stabilise domestic prices.
Frigid temperatures are forecast in parts of the U.S. Plains this week, but snowfall expected ahead of the cold should protect the region’s dormant hard red winter wheat crop against major damage, agricultural meteorologists said.
Commodity funds bought a net 5,000 soybean contracts, 4,000 corn contracts and sold an estimated 1,000 wheat contracts, traders said.
