Palm oil rises

31 Dec, 2011

Malaysian crude palm oil futures inched up on Friday in thinly traded markets, lifted by positive US economic data and concerns that heavy rain fall in second-largest producer Malaysia may cause supply disruption. Despite the rise, palm oil posted its first annual decline since 2008. It lost more than 16 percent this year, a performance that pales in comparison to the 42 percent gain in 2010.
"We see light volumes on the last trading day. Traders are likely to stay on the sidelines and stay cautious before the full December export figures," said a dealer with a foreign commodities brokerage in Malaysia. Benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange closed 0.6 percent higher at 3,175 ringgit ($1,000) per tonne.
Traded volumes for palm oil futures stood at 12,308 lots of 25 tonnes, much thinner than the usual 25,000 lots as traders were unwilling to take positions ahead of the long weekend. Reuters technical analyst Wang Tao posted a bearish view, saying that palm oil will fall further to 3,116 ringgit per tonne, as indicated by a Fibonacci retracement analysis and a channel technique.
The Malaysian Meteorological Department issued a warning that heavy rains may continue until Friday for key oil palm growing states of Johor, Pahang and Sabah, which account for almost 60 percent of national palm oil output. US soyoil for January delivery gained 0.6 percent, in line with the stronger global markets while the most active September 2012 soyoil contract on China's Dalian commodity exchange also inched up 0.4 percent.

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