02/08/2011 (Bloomberg) - Palm oil gained for the first time in three days, joining a rally in commodities and stocks, after President Barack Obama said Congressional leaders reached an agreement to raise U.S. debt ceiling, avoiding a default.

The October contract advanced as much as 0.8 percent to 3,120 ringgit ($1,060) per metric ton on the Malaysia Derivatives Exchange and ended the morning trading session at 3,113 ringgit. Futures lost 1.4 percent last week.

Leaders of the Republican and Democrat parties have reached an agreement that will reduce the U.S. deficit and avoid a default, Obama said in remarks at the White House. Congressional leaders reached a bipartisan agreement to raise the debt ceiling by at least $2.1 trillion, sufficient to serve the nation’s needs into 2013.

“This provides some bullish sentiments not only to the palm oil market, but to the wide range of commodity markets as well,” Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore.

Crude for September delivery advanced by the most in more than a week in New York today, gaining as much as 1.7 percent to $97.29 a barrel, while wheat and copper also rallied.

Chinese Manufacturing
Prices were also supported after a Chinese manufacturing index came in higher than economists estimated in July, Ker said. The Purchasing Managers’ Index was at 50.7 for July compared with 50.9 in June, the China Federation of Logistics and Purchasing said in a statement today. That was more than every forecast in a Bloomberg News survey of 13 economists. The median estimate was for a reading of 50.2.

China is the world’s biggest vegetable oil consumer and the data may ease concerns that Premier Wen Jiabao’s campaign to tame consumer and property prices will trigger a deeper slowdown that limits the nation’s contribution to global growth.

“Although it’s lower than the last month, it’s again proving the fact that the Chinese government has been successful in cooling down the economy, so speculation of further tightening will be off at the moment,” said Ker.

Malaysia’s palm oil exports climbed 13 percent to 1.63 million tons in July from 1.44 million tons in June, independent market surveyor Intertek said July 30.

Soybean oil for December delivery advanced as much as 0.9 percent to 56.92 cents per pound in Chicago. Soybeans for delivery in November gained as much as 0.8 percent to $13.6775 per bushel.

Palm oil for May delivery climbed as much as 1.4 percent to 9,184 yuan ($1,424) a ton on the Dalian Commodity Exchange and soybean oil for delivery in the same month rose as much as 1 percent to 10,304 yuan a ton.