Palm Futures Hit More Than 2-Year High

MALAYSIAN

palm oil futures hit more than a two-year high yesterday on a firmer

soy complex driven by lingering weather concerns and the weaker US

dollar.

The palm oil market, which broke a two-day losing streak,

was also supported by the start of the annual monsoon season this month

that brings more rainfall and can hamper harvesting in major oil palm

growing areas in Indonesia and Malaysia.

The benchmark Jan 2011

crude palm oil contract on Bursa Malaysia Derivatives ended 1.6 per cent

higher at RM3,064, after rising as much as RM3,086 — its strongest

level since July 28, 2008.

Traded volume more than doubled to 20,472 lots of 25 tonnes each.

“The

uptrend may continue as edible oil and grain market sentiment was high

on dollar weakness and weather concerns,” said a trader with foreign

brokerage in Kuala Lumpur.

“Palm oil will try to hit 3,100 the earliest today or next week.”

Reuters

technical analysis showed Malaysian palm oil is poised to rise towards a

bullish target at RM3,194 per tonne, as the uptrend is still intact.

Traders

are also on the lookout for end-October exports data due on November 1,

which will give the market more direction. The weaker US dollar trend

will be keenly watched as palm oil priced in that currency will be

cheaper for overseas buyers.

“October exports could be either

plus or minus 2 percent because exports data for the first 25 days

showed a 4 per cent fall,” said a trader in Kuala Lumpur. “It is very

hard to predict.”

Crude oil crept higher yesterday, with all eyes on US
weekly

jobless numbers due later for clues about the potential size and pace

of the US Federal Reserve’s stimulus package expected next week.

Soy

futures on the Chicago Board of Trade rallied late to close higher on

Wednesday as spillover strength from wheat helped offset pressure from a

firmer dollar.

In Asian trade yesterday, US soyoil for December

delivery rose 0.8 per cent and China’s most active September soyoil

contract gained half a per cent.

Source : Business Times

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