Malaysian palm oil at new eight-year high

Malaysia's crude palm oil futures ended 1.2 percent higher on Tuesday to new eight-year highs, boosted by strong gains in the soyabean oil market. The benchmark third-month June contract on the Bursar Malaysia Derivatives Exchange finished up 25 ringgit, or 1.2 percent, at 2,086 ringgit ($603) a tonne, a level not seen since January 1999.
The contract hit an intra day high of 2,103 ringgit. "The market has picked up due to soyabean oil, which is strong as soyabean acreage is getting reduced in the United States," one dealer said.
"It is also up due to technical and speculative short covering, since the psychological resistance level of 2,100 has been broken." The benchmark contract was at eight-year high of 2,076 ringgit a tonne on Friday on the back of firm crude and soyaoil markets.
Other contracts rose between 25 and 42 ringgit, in overall trade of 15,467 lots of 25 tonnes each. Soyabean futures at the Chicago Board of Trade rallied on Monday, recovering from a sell-off that started on Friday when corn fell the 20-cent limit on the government's forecast for big 2007 corn plantings, traders said.
Expectations of fewer soyabean plantings and a delayed soya harvest in South America due to rain helped the soyabean market rebound. Soyaoil settled 0.15 to 0.45 cent per lb firmer, with May up 0.28 at 32.76. In electronic trade during Asian hours on Tuesday, the May contract was up 0.07 cent at 32.83 cents an lb.
Malaysian palm oil usually follows the US soyaoil market because both commodities are used in products ranging from food and cosmetics to biodiesel.
Malaysian palm oil prices soared 40 percent last year on the back of biodiesel demand and the market are forecast to rise around 20 percent this year. In the physical market, crude palm oil for April shipment in the southern region was quoted at 2,105/2,115 ringgit a tonne. Deals were done between 2,100 and 2,110 ringgit.
Exports of Malaysian palm oil products for March 1-31 rose 15.8 percent to 991,550 tonnes from 856,192 tonnes shipped in February, cargo surveyor Interlake Testing Services said. Another cargo surveyor, Society General de Surveillance, said palm exports rose 16.3 percent to 998,759 tonnes during the month from 858,485 tonnes in February.