25/12/2007 (The Star Online), Petaling Jaya - Crude palm oil (CPO) futures prices climbed to their highest in a month, supported by high global crude oil prices of above US$93 a barrel and rising wheat prices, which is expected to take acreage away from soybean farmers in the United States.

The US soybean crop, used mainly for the production of soybean oil – a direct substitute for CPO in food and confectionary manufacturing – is a strong driver of the CPO price.

The three-month CPO futures contract for March delivery closed at the day's high of RM3,030 a tonne yesterday, just RM38 off the record intra-day high of RM3,068 reached in November.
 
Meanwhile, Bloomberg reported that customs data in China showed a surge in soybean oil imports in November due to a shortage in the country after drought affected domestic production.

Soybean oil imports rose more than six times to 342,358 tonnes in November from 54,233 tonnes a year earlier, the report said.

Soybean futures on the Chicago Board of Trade (CBOT) rallied to a 34-year high on Friday. Reuters quoted traders as saying the record high price was due to follow-through buying and bullish long-term fundamentals.

At 6.45pm Malaysian time, soybean oil for January delivery on CBOT was up five US cents at US$47.20 per pound versus Friday's closing of US$47.15.

Concerns over supply due to floods and heavy rains in Malaysia also supported CPO prices.

Floods in key producing states of Pahang, Kelantan, Kedah and Johor could halt the harvesting of fresh fruit bunches, hamper transport and cause the fruit to rot.

While flood conditions are expected to improve – the Meteorological Department has lifted its “red alert” over the weekend – parts of Peninsular Malaysia and Sarawak were forecast to experience high tide until Jan 29.

Higher exports of Malaysian palm oil from Dec 1 to 10, as reported by cargo surveyors on Friday, also continued to exert some positive influence.

Societe Generale de Surveillance pegged exports at 1.4% higher at 964,090 tonnes for the period against 950,983 tonnes in the same period in November.

The strong CPO prices boosted heavyweight plantation counters Sime Darby Bhd (up 10 sen to RM11.30), Kuala Lumpur Kepong Bhd (up 30 sen to RM16.50) and IOI Corp Bhd (up 20 sen to RM7.35), and helped push up the KL Composite Index by 19.68 points yesterday.