Trader's Comment: CPO futures surrender some of its earlier gain

CPO futures surrender some of its earlier gain after crude oil prices encounter some profit taking activities during Asian time trading. Benchmark Jan09 initially open RM71 higher at 1649, tracking overnight NYMEX crude oil that ended more than $6 higher, as traders begin to place higher expectations that OPEC members will comply with their recent decision to cut oil production, coupled with the weakening of dollar. Furthermore, India had also decided to delay their decision on re-imposing import duties on crude vegetable oil. This had caused CPO prices to shoot up and hit intra day high of 1723 (+145 from yesterday’s settlement) immediately market opened. Nevertheless, this sharp move had attracted some profit taking activities to take place. Together with the victory of Democrat Barack Obama, dollar began to gain back strength and this caused commodities market to ease off. Asian time crude oil also fell around $3 due to certain profit taking activities. Benchmark Jan09 started to tumble for the rest of the day, and hit intra day low of 1626 during afternoon session, before it settled at 1640.