05/03/2010 (The Star Online), Kuala Lumpur - Malaysia’s palm oil futures jumped as much as 1.9% to two-month highs yesterday as traders took positions ahead of a key industry conference due next week, expecting a flow of bullish news.

One local trader said the palm oil market was going to continue trading in a tight range before the Bursa Malaysia’s Palm Oil and Laurics Conference started on Monday.

“People are thinking Bursa Malaysia Palm Oil Conference speakers will say the market will go bullish at levels like RM2,800-RM3,000 (a tonne),” a trader with a foreign brokerage based in Kuala Lumpur said.

Benchmark May crude palm oil futures on the Bursa Malaysia Derivatives Exchange closed at RM2,674 per tonne after rising as high as RM2,686, a level unseen since Jan 6.

Traded volumes surged to 16,754 lots of 25 tonnes each from the usual 10,000 lots.

Traders are also on the lookout for February palm oil stocks, production and export data due to be released on Wednesday by industry regulator Malaysian Palm Oil Board.

Crude oil fell towards US$80 a barrel, weighing on other vegetable oil markets. The soyoil March contract at the Chicago Board of Trade slipped in Asian hours as expectations of a bumper soybean crop offset rising crude oil prices.

In China, the most active September soyoil futures fell almost 0.9% due to expectations of rising soybean imports in April and May.

One Chinese trader said rising soybean imports would not have long-term effects on palm oil’s cash and futures markets.

“The spread between soybean oil and palm oil could further narrow to below US$100, and palm oil will grow when the weather is warmer.

“Imports of palm oil from February till May is likely to increase by 5%-10%,” one analyst in Shanghai said.

China, the world’s second-largest palm oil importer, bought 900,000 to 1.1 million tonnes of palm oil in February to May last year.

In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, sold 4,500 tonnes of crude palm oil at a top price of 7,716 rupiah (US$0.833) per kg against 7,702 rupiah on Wednesday. — Reuters