Trader's Comment: Malaysia palm oil prices failed to sustain yesterday’s gain amid weaker crude oil prices.

Malaysia palm oil prices failed to sustain yesterday’s gain amid weaker crude oil prices. Benchmark Jan09 open RM77 lower at 1589, following overnight crude oil fell almost $4 a barrel, caused by more fears on weaken oil demand. It hit the morning low of 1575, thereafter trading at a narrow range of 1610-1581 till afternoon session. A prominent research house, Macquarie Research, had stated that CPO prices could be trading at $400 a tonne in 2009 (which is equivalent to around RM1400 based on today’s exchange rate) due to falling price of crude mineral oil and also rising stock level in Malaysia and Indonesia. In the later part of afternoon session, CPO prices encountered another fall. Benchmark Jan09 tumbled to hit intra day low of 1546, but it rebounded a little to settle at 1578 after some short covering activities emerged. News that Indonesia stock level could increase 67% this year had also added onto the already weak sentiment in the market.