Trader's Comment: CPO futures surrendered its earlier gains to end at negative territory after a mix trading day

CPO futures surrendered its earlier gains to end at negative territory after a mix trading day. Benchmark Jan09 initially open RM40 higher at 1520, following the surge in overnight NYMEX crude oil of nearly 4% coupled with higher CBOT soy complex. However, traders remained concern on the weak fundamentals, with global demand still poor while production and end stocks were at higher level. Easier NYMEX crude oil in Asian time zone prompted some selling activities into BMD, this sent Benchmark Jan09 prices to slide to hit intra day low at 1447 in the afternoon session. Statement issued by CLSA which stated that palm oil may reach RM1000 next year due to oversupply and low demand for biofuel, also provided selling pressure onto the already weak sentiment. Later, Benchmark Jan09 bounce back to 1488 due to some short covering activities emerged before it settled at 1455.