05/07/2011 (San Francisco Chronicle) - Palm oil rebounded from the lowest level in eight months on speculation lower soybean acreage in the U.S., the world's biggest exporter, will reduce global vegetable oil supplies.

The September-delivery contract advanced as much as 1.6 percent to 3,084 ringgit ($1,028) per metric ton on the Malaysia Derivatives Exchange and ended the morning trading session at 3,071 ringgit in Kuala Lumpur. Futures fell 2.6 percent last week for a fifth weekly loss, the longest streak in almost three years, to close at the lowest level since Oct. 22.

Soybean futures rose the most in four weeks on July 1 on speculation that reduced Midwest seeding will trim supplies from the U.S. Planting dropped to 75.208 million acres, less than analysts expected and below the 76.609 million estimated in March, as farmers switched to corn, the U.S. Department of Agriculture data showed on June 30.

"The USDA national acreage report was actually bullish for soybeans," Ker Chung Yang, an analyst at Phillip Futures Pte, said by phone from Singapore. "Investors have a clearer picture on the report now."

Soybean futures for November delivery advanced 1.4 percent to $13.125 a bushel on July 1, the biggest gain since June 2. U.S. markets are closed today for the Independence Day holiday.

Gains in palm oil today may be capped as the Chicago Board of Trade is closed, Ker said.

'Small Rebound'

"This is just a small rebound" after the sharp fall in the last five weeks, Chandran Sinnasamy, head of trading at LT International Futures (M) Sdn., said by phone from Kuala Lumpur. "The U.S. dollar is slightly weaker, crude oil is maintaining, so people are taking this opportunity to support prices" ahead of data from the Malaysian Palm Oil Board next week, he said.

The palm oil board will report production, stockpile and export data for the month of June on July 11.

January-delivery palm oil on the Dalian Commodity Exchange climbed as much as 1.1 percent to 8,884 yuan ($1,375) a ton. Soybean oil for delivery in the same month rose as much as 1.2 percent to 10,066 yuan a ton.