By Glenys Sim
Jan. 19 (Bloomberg) -- Palm oil futures advanced as their first weekly drop in four and the discount to soybean oil lured investors. Palm oil dropped 3.9 percent last week as orders fell from China and India, the largest buyers of vegetable oils.
``Given a weakening demand scenario for edible oils in general and no visible signs of supply pressure, it is still too early to become bullish on the palm oil story for 2009,'' said Sunaina Dhanuka, an analyst at Macquarie Group Ltd.
Palm oil for April delivery rose as much as 2.1 percent to 1,872 ringgit ($525) a ton on the Malaysia Derivatives Exchange, and traded at 1,860 ringgit by the 12:30 p.m. local break.
Soybean oil gained 0.6 percent to 34.59 cents per pound in Chicago on Friday on speculation demand for U.S. soybeans will increase after hot, dry weather damaged crops in Argentina and Brazil, the two biggest exporters after the U.S.
That leaves the ratio of palm oil to soybean oil at 0.68, down from 0.73 on Jan. 12, Bloomberg data show. U.S. markets are closed today for a holiday. Palm oil often tracks soybean oil as it's a substitute in food and fuel applications.
To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net
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