BEIJING, Sept 22 (Reuters) - Torrential rain in the U.S. Midwest and typhoons in China have spurred the biggest rally in years in China's canola and palm oil market as investors fretted about supplies in the world's top edible oil market, traders and analysts said on Thursday.
The most-active palm oil futures for delivery in January DCPcv1 hit 5,794 yuan ($869) per tonne on Thursday, their highest in nearly two years. Prices have risen 5.8 percent this week and were on track for their best quarterly performance in six years.
Chinese edible oil markets have been pulled higher by stronger soybean prices in the United States where rains have threatened to delay the harvest, Lief Chiang, grains and oilseeds analyst at Rabobank in Shanghai said. GRA/
The canola, or rapeseed oil, market rose after typhoons lashed one of the nation's top producing regions, forcing some crushers to halt output.
At least four crushing companies in Fujian Province, a major rapeseed crushing region in southeastern China, have halted production since last week, according to consultancy Shanghai JC Intelligence Co. Ltd (JCI). It did not identify the companies.
Prices for the most-active January 2017 contract COIcv1 soared to 6,428 yuan on Thursday, the highest in a month. Prices are up 4 percent this week, and on track for one of the biggest weekly gains of the past year.
The buying spree started on Monday, with front-month prices rallying 2.6 percent, one of the biggest daily gains in at least four years. Turnover on that day was 2.4 million contracts worth some $2.3 billion.
The closures boosted physical spot regional prices too - in other major rapeseed crushing regions, such as Guangxi and Jiangsu provinces, prices have jumped 100 yuan to 2,480 yuan per tonne, according to Stephen Lu, analyst at JC Intelligence.
The outages may stir concerns about supplies in the world's top consumer of the oilseeds, where output has fallen and crushing along the coastal provinces, like Fujian, has expanded in recent years. The country has capacity to crush some 40 million tonnes of canola seeds a year.
If the outages are prolonged, the market won't get any relief from government stockpiles. JC Intelligence's Stephen Lu said Beijing won't auction of any of its big canola reserves until June next year.
($1 = 6.6694 Chinese yuan renminbi)