05/05/2012 (Bloomberg) - Palm oil posted the biggest weekly decline this year on speculation that production in Malaysia probably gained for a second month in April, boosting global cooking-oil supplies.

The July-delivery contract declined 0.6 percent to 3,358 ringgit ($1,104) a metric ton on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures lost 4.2 percent this week, the biggest five-day loss since November.

Palm oil output gained 2.1 percent to 1.21 million tons in March from 1.19 million tons in February, the Malaysian Palm Oil Board said on April 10. The board is scheduled to release official data for April on May 10.

“Earlier people had anticipated palm oil production to be unchanged, and now they are predicting an 8 percent to 9 percent rise,” Chandran Sinnasamy, head of trading at LT International Futures (M) Sdn., said by phone from Kuala Lumpur. “Soybean planting in the U.S. was also started earlier than anticipated this year and weather is also favorable.”

About 12 percent of the U.S. soybean crop was planted as of April 29, compared with the previous five-year average of 5 percent, a Department of Agriculture report showed April 30. Soybean oil competes with palm oil for use in food and fuels.

Soybeans for July delivery gained 0.4 percent to $14.79 a bushel on the Chicago Board of Trade. Soybean oil for the same month gained 0.3 percent to 54.30 cents per pound.

Palm oil for September delivery climbed 0.2 percent to end at 8,650 yuan ($1,373) a ton on the Dalian Commodity Exchange, while soybean oil for the same month closed little changed at 9,772 yuan.