Palm futures fall as investors take profits

MALAYSIAN crude palm oil fell yesterday for the first time in over a week on a firmer US dollar and weaker technicals, and as traders took profits from the run of gains.
But the market, which has risen 34 per cent in 2010, may rally further if more monsoon rains lash oil palm estates in Malaysia and dry weather heightens the risk of a poor South American soy crop, traders said.
A jump in US bond yields boosted the dollar for a second day after President Barack Obama proposed to extend Bush-era tax cuts, fuelling inflation concerns and questions about a stable recovery for the world’s largest economy.

Investors trimmed their exposure to riskier assets and bought more US dollars, triggering profit-taking across the agricultural commodity space.
“The US dollar created some excuses to take profit as well as some weak technicals. Most palm oil players will sit tight until the Malaysian Palm Oil Board issues likely bullish data tomorrow,” said a dealer with a foreign trading firm.
The benchmark Feb 2011 crude palm oil contract on the Bursa Malaysia Derivatives Exchange ended 0.4 per cent lower at RM3,594 a tonne, easing from a 29-month high hit on Monday.
Traded volume more than doubled to 24,790 lots of 25 tonnes each from the usual 10,000 lots as traders booked profits after a public holiday on Tuesday.
Reuters technical analysis suggested Malaysian palm oil will retrace to RM3,496 per tonne as it completed a five-wave cycle at Monday’s high of RM3,618 .
Traders are expecting bullish numbers from the MPOB tomorrow after a Reuters poll forecast palm oil stocks probably fell in November.
Other vegetable oils broadly fell, with China’s markets on the lookout for any monetary tightening from the world’s largest consumer of commodities.
US soyoil for December delivery fell 1.2 per cent and the most active September 2011 soyoil contract on China’s Dalian Commodity Exchange dropped 1.5 per cent.
RUBBER
THE Malaysian rubber market extended its record-breaking rally yesterday on continuous concerns that supply may fall short of rising demand from tyre makers.
Rain and flooding in Asian nations have disrupted production of rubber.
The price of rubber amid the tight supply went up to 1,357.50 sen per kg on Monday, its highest price in 38 years after a rally in oil raised the appeal of the commodity as an alternative to oil-based synthetic products.
Meanwhile, rubber futures on the Tokyo market edged lower yesterday as investors took profits following a drop in oil price and as rubber prices approached 30-year highs. A weaker yen limited the losses.
At noon, the Malaysian Rubber Board's official physical price for tyre-grade SMR 20 surged 10 sen to 1,367.50 sen per kg, while latex in bulk added six sen to 920.50 sen per kg.
The unofficial sellers' closing price for tyre-grade SMR 20 gained 10 sen to 1,372 sen per kg and latex-in-bulk climbed 5.5 sen to 923 sen per kg.
TIN
THE Kuala Lumpur Tin Market (KLTM) closed lower yesterday by US$300 at US$25,200 a tonne, tracking the fall in the price of the commodity on the London Metal Exchange (LME), a dealer said.
He said the market is still steady despite the lower price with trading dominated by Japanese and European buyers.
The tin price on the LME closed US$200 lower at US$25,300 a tonne.
On the local market, bids stood at 20 tonnes against offers of 80 tonnes.
The day's turnover declined to 35 tonnes from 49 tonnes on Monday.
The price differential between the KLTM and LME was unchanged at a premium of US$325 compared to Monday.
The local market was closed on Tuesday for the Awal Muharram celebration
(Source: ://www.btimes.com.my/Current_News/BTIMES/articles/20101208175734/Article/#ixzz17Z2W9bQc)