crude palm oil futures rose nearly 3 per cent to touch a fresh two-year

high yesterday, supported by gains across the commodity markets.

“Palm

oil investors covered their short positions during the last hour before

closing as most of the commodities rallied on the back of a weaker

dollar,” said a trader with foreign brokerage in Kuala Lumpur.

January

2011 palm futures on the Bursa Malaysia Derivatives Exchange rose RM90

to RM3,363 after touching a more than two-year high of RM3,372 earlier

Traders,

who are awaiting official data on Malaysia’s palm oil production,

stocks, imports and exports due today, said prices of the vegetable oil

are likely to stay firm despite a poll showing that the stocks level may

hit new highs.

A Reuters poll on Monday reported Malaysia’s

October palm oil stocks might hit nine-month highs of 1.95 million

tonnes as seasonally strong production outstripped much weaker overseas

demand.

A Reuters technical analysis showed Malaysian palm oil futures with a bullish target of RM3,387.

The outlook will also depend on cargo surveyors’ report of overseas demand during the first 10 days of November today.

US soyoil for December delivery rose 1.4 per cent in Asian trading hours, mirroring a similar rise in soybean futures.

The

most active China September soyoil contract rose 1.1 per cent to 10,358

yuan, after hitting its highest since July 2008 the previous day.

“Funds

flowed into commodity and equity markets from the property market after

the Chinese government implemented new policies like higher interest

rates,” said an oil analyst in Shanghai.

“I believe crude oil

will hit over US$100 by the end of this year, which would eventually

bolster global vegetable oil markets.”