26/07/2012 (Bernama) - Soyaoil's premium to crude palm oil (CPO) has widened and this should encouraged substitution from soyaoil to palm oil, said Maybank Investment Bank (Maybank IB).

"If the US crop conditions worsen in the coming two-three weeks, there will be further upside to soyaoil, which might lift CPO prices as well," it said in a research note Wednesday.

It said while soyaoil price has further upside should soyabean crop prospects worsen, palm oil's discount to soyaoil was likely to stay high given that upcoming high production months for palm oil.

Maybank IB said according to the US Department of Agriculture, the US soyabean corp conditions had worsened for the seventh consecutive week.

"Crop conditions for soyabeans had declined to their lowest since 1988, with only 31 per cent of planted area nationwide rated 'good or excellent' and 35 per cent rated 'poor or very poor'," it said.