Malaysian palm futures hit a 38-week intraday high on Monday, tracking soya which soared on fears of tight global vegetable oil supplies, but gave up some gains in late selling, traders said. "I think the main driver was soya prices. Our own (palm) fundamentals are a non-factor today. But prices moved too fast so people were tempted to take profits," said a trader at a Kuala Lumpur-based commodities brokerage.
The benchmark July contract rose 107 ringgit, or 4.1 percent, to 2,702 ringgit per tonne ($765.66), after going as high as 2,798 ringgit, the strongest intraday level since August 8 last year.
Other traded months rose between 104 and 203 ringgit. Overall volume more than tripled the usual at 36,748 lots of 25 tonnes each. Traders said fears over tightness in global vegetable oils have sent soyabean prices to a seven-month high and spurred heavy buying in palm oil futures. News about a reduction in the soya crop in Argentina, the world's third biggest exporter, heightened fears.
Argentina's 2008/09 soya harvest is seen dropping to 34 million tonnes from a previous estimate of 36.2 million, due to poor yields, the Buenos Aires Grains Exchange said on Wednesday. "That is a very big reduction and we were actually not ready for that kind of reduction," another Malaysian trader said.
US soyaoil for May shipment rose 2.0 percent in Asian trade and the most-active September soyaoil contract on Dalian's Commodity Exchange surged 4.98 percent. The price of tropical oil - used in products ranging from soap to biodiesel - has gained 59 percent this year, mainly driven by fears of falling palm stocks in the world's number 2 producer.
INDONESIA PALM TRADES In Indonesia, the world's top producer of palm oil, the Jakarta-based state marketing centre said it sold 4,500 tonnes of crude palm oil at a top price of 8,978 rupiah per kg, up from 8,708 rupiah a kg last Thursday. Producers in Medan - home to Belawan port, Indonesia's main palm oil export port - did not hold a palm oil tender.
Meanwhile, refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 8,800 rupiah per kg, up from 8,500 rupiah a kg last Thursday. In the Malaysian physical market, palm oil for May delivery was sold between 2,850-2,880 ringgit per tonne in the southern and central regions.
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