CPO Futures Hit 29-Month High

MALAYSIAN crude palm oil hit a 29-month high yesterday as a weaker dollar spurred

risk-taking and on spillover support from wheat prices, which are

being bolstered by concerns over Australia’s grains output.

The

dollar was on the defensive yesterday after the US Federal Reserve said

it was open to injecting more funds into the economy.

Palm oil

has climbed by more than a third this year, with the biggest weekly

gain so far this year last week on bullish forecasts from key industry

analysts at an Indonesian conference and erratic weather hitting grains

and oilseed regions.

Heavy rains in Australia have sparked concerns about the quality of wheat supplies, lifting US wheat futures and supporting other agricultural commodities.

“The

market expectation of palm oil stocks falling in November added to the

rally on tight grain supplies and the weaker dollar,” said a trader

with a foreign commodities brokerage.

The Malaysian crude

palm oil contract jumped 2.8 per cent to RM3,618 a tonne, a level

unseen since July 4, 2008, before settling at RM3,610.

Traded

volume more than doubled from normal to 27,666 lots at 25 tonnes each

on short covering ahead of a Malaysian public holiday on today.

Malaysia’s

palm oil stocks probably fell in November from nine-month highs hit

the previous month as output declined on heavier rains and exports

climbed, a Reuters poll showed on yesterday.

Source : Business Times


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