Crude palm futures in Malaysia rose almost 5% and CBOT soybean oil futures spiked in early Asian trade Oct 31 after Russia announced it will no longer be part of the UN-brokered grain corridor deal with Ukraine and Turkey.

January crude palm oil futures on the closely watched Bursa Malaysia derivatives index shot up to MR 4,189/mt ($886/mt) at the close of the morning session Oct. 31, up 4.6% from the open.

CBOT soybean oil's most active traded December contract (ZLZ22) touched 73.95 cents/lb while trading around 73.38 cents/lb in mid-morning trade, up more than 2.2% on the day.

Soybean oil futures on the CBOT have rallied in October along with other global vegetable oil markets on supply concerns and strength in crude oil. Soybean oil hit a four-month high of 73.97 cents/lb Oct. 27.

Russia backing down from the UN trade deal seems positive for palm on the short term, David Ng, senior proprietary trader at IcebergX Sdn Bhd in Kaula Lumpur told S&P Global Commodity Insights.

Palm oil, soybean oil and sunflower oil are the most traded vegetable oils and are linked in their price movements as they compete for a share of the global market.

"The move would see the clouds of uncertainty hovering over the sunflower oil exports from Ukrainian ports and becomes a potential bullish thing for competing vegetable oils, especially to soybean oil and palm oil," said Anil Kumar Bagani, head of research at Mumbai-based vegetable oil brokerage Sunvin Group.

Russia announced Oct. 29 that it was pulling out of the grain deal with Ukraine after it accused Ukraine of attacking Russian ships in Crimea and said the safety of civilian bulk carriers involved in the deal can no longer be guaranteed, according to Russian state-owned news agency RIA Novosti.

Once the largest exporter of sunflower oil, Ukraine's shipments had been constrained until the two countries signed an UN-assisted deal with Turkey on July 22 to resume grain and fertilizer exports through the Black Sea.

The corridor was originally set to expire Nov. 19. The Black Sea region accounts for 60% of global sunflower oil output and 76% of its exports.

"While the future of the palm oil rally will remain dependent on Indonesia's pending decision on its export levy, soybean oil has multiple factors for its strength including tighter supply forecast and higher biodiesel demand," said Manoj Shukla, vegetable oil and meal analyst at Agriworld.

Market sources expect Indonesia to reinstate an export levy on palm oil exports from Nov. 1 as the country's palm oil stocks have come back down to manageable levels in recent months after hitting a record high in May.

Meanwhile in soybean oil markets, the crushing of soybeans is slow in Argentina while heavy rains are making sowing difficult in some parts of Brazil. This along with strong biodiesel demand in the US would support soybean oil prices in the near term, said Mitesh Saiya, manager of vegetable oil brokerage Kantilal Laxmichand & Co.