Palm oil futures rise amid a new heat wave in Argentina

May palm oil futures in Malaysia rose 1.71% to a 7-week high of 4,212 ringgit/t or $949.9/t on Wednesday amid lower palm oil output and heightened concerns about the loss of part of Argentina's soybean crop due to a new heat wave.

According to forecasts, in the next 10 days, heat is expected in Argentina with temperatures above 30 ^o C and little precipitation, which will intensify the drought and worsen the prospects for the future harvest of soybeans and corn.

"Palm oil prices were supported by a possible production cut in Argentina, a rise in soybean oil futures on the Chicago WTO and a jump in palm olein prices on the Dalian exchange, which rose 1.07%, while soybean oil futures jumped by just 0.38%," said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.

March soybean oil futures on the Chicago Stock Exchange during February rose 2% to $1,382/t, adding 1.3% for the month, but they are 1.9% lower than last year's level.

It is worth noting that the increase in prices for vegetable oils will limit the further fall in oil prices. April Brent oil futures on the London ICE exchange fell by 6.2% to $80.8/barrel in a week on data about the negative state of the Chinese economy, which is the world's main oil importer.

Information coming from China indicates an uneven recovery of the economy, which negatively affects the demand for energy carriers. China's car production and sales fell more than 30% year-on-year in January, while home sales for China's top 100 homebuilders fell 33%, signaling a further slump in the country's housing market.