KUALA LUMPUR, Dec 13: Malaysian crude palm oil futures ended 1.5 percent higher on Thursday as investors took positions following floods in plantation areas and steep rises overnight in the crude and rival soyaoil markets.
But some investors later cashed in as crude oil and soyaoil prices began easing, traders said.
Crude oil markets to a greater extent now influence palm oil and soyaoil prices because of the use of these edible oils in producing biofuels, which compete directly with petroleum.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled up 43 ringgit at 2,920 ringgit ($882), after rising as high as 2,934 ringgit.
If weather concerns were the only factor, the market may have not passed the 2,900 ringgit level. It was soya oil and crude that brought the market back to life, said a head dealer with a foreign trading firm.
Other traded months rose between 38 and 47 ringgit except for the July 2008 contract which fell slightly. Overall trade stood at 10,245 lots of 25 tons each.
The outlook till the end of the year is that of consolidation but crude oil and the flood situation will provide some upsets,” said another dealer. Oil prices eased below $94 a barrel on Thursday, taking a breather after a rally of almost 5 per cent in the previous session on a drawdown in US crude stocks, and a move by major central banks to ease tight credit conditions.
In Malaysia’s physical market, crude palm oil for December shipment in the southern region was quoted at 2,930/2,940 ringgit a ton. Traders did deals between 2,920 and 2,930 ringgit.—Reuters
