Malaysian palm oil jumps

Malaysian crude palm oil futures jumped more than 4 percent in early trade on Monday, driven by supply worries stoked by floods in some palm growing states in the country and rising soyaoil prices in China. January 2011 palm futures on the Bursa Malaysia Derivatives Exchange were up 2.6 percent at 3,273 ringgit ($1,060) a tonne, after having risen as high as 3,348 ringgit - a level unseen since July 18, 2008.
"Traders were covering positions after a three-day holiday as soyaoil on China's Dalian rose on speculative buying," said a trader with a foreign brokerage in Kuala Lumpur. "Some investors expect prices to go higher due to the floods in Northern Malaysia." A Reuters technical analysis showed Malaysian palm oil might hit 3,387 ringgit, based on its strong momentum.
Top analyst from Godrej International, Dorab Mistry, on Sunday said Malaysian crude palm oil futures may hit 3,300 ringgit per tonne in the next few weeks as weather concerns plague global oilseed output. Worldwide commodities rallied in Asian hours as demand for higher-yielding assets got a lift from a surprisingly strong US jobs report.
A super-loose US monetary policy that promises to keep interest rates near zero for a long time has driven investors to look for yield, in part on worries that easy policy would fuel future inflation. US soyaoil for December delivery fell 0.2 percent after it hit a fresh two-year high of $52.85 the previous session.
US investors are seeking direction from the US Department of Agriculture report on world demand/supply of agricultural commodities to be released on Tuesday. On Monday, the most active September soyaoil on China's Dalian Exchange rose 0.7 percent to 10,192 yuan ($1,529) after touching their highest of 10,476 yuan since July 31, 2008.
"Soyoil is extending gains from the previous week on overseas commodity markets on expectations on inflation," said Zhang Juan Cong, an oil analyst in China's Southern city of Hangzhou. "Worries about palm oil supply shortage due to weather concerns in Malaysia also driven up palm olein prices." China most active September palm olein also climbed 2.5 percent to 9,466 yuan ($1,420).