Malaysian crude palm oil futures rose more than 2 percent after tailing a rally in US soyaoil, but profit-taking caused the market to close below on Monday's 6-1/2 month highs.
Bursa Malaysia Derivatives' benchmark third-month crude palm oil contract, December, ended at 1,475 ringgit ($391.35), up 15 ringgit on the day.
It had surged as much as 35 ringgit in trade to touch 1,495 prompting traders to think it could breach the 1,500 level last seen on March 16.
"It looks like some fundamental strength is still needed before we get there," said a trader.
"For now, 1,500 is still a valid resistance." The broader market ended up 13 to 25 ringgit. Overall volume was 7,154 lots of 25 tonnes each, compared with Friday's 5,107 lots.
The market typically sees 6,000 lots or more on a busy day. Soyaoil futures on the Chicago Board of Trade surged at Friday's close, with October up 1.17 cent a lb at 23.72 cents a lb.
Palm oil prices have been on an uptrend since on Friday, with December futures closing up 12 ringgit after speculation of strong exports in coming months as Europe's demands for biofuels grow.
Malaysia, the world's top oil palm grower, hopes to produce enough palm diesel in the future to cash in on the burgeoning demand for green fuels as crude oil prices continue to spike.
Palm oil dealers said rapeseed was the biggest source of biofuel in Europe currently and palm was supplementing the region's edible oil needs.
But they say the equation could be reversed in the future, as palm oil was at least $200 a tonne cheaper than rapeseed oil. Offer prices of physical crude palm oil also closed up about 25 ringgit a tonne, in line with the trend in futures.
Physical crude palm oil for October saw offers at 1,485 ringgit a tonne and bids at 1,480 in the southern region of Malaysia at the close.
In the central region, offers/bids stood at 1,485/1,475.
Trades closed at 1,480 ringgit in the south and 1,480-1,477.50 in the central zone.
PALM OIL FUTURES:
October (south): 1485.
Open/High/Low: 1475/1495/1474.
Previous closes: 1460.
PALM OIL PHYSICALS:
December (3rd month): 1475.
Previous settlement: 1460.
FUTURES:
Benchmark December up 15 ringgit at 1,475 ringgit ($391.35) a tonne, off morning's 6-1/2 month highs.
PHYSICALS: Offers for October up 25 ringgit.
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