Trader's Comment: Palm oil futures drew back and give up yesterday’s gain as crude oil weaken further.

Palm oil futures drew back and give up yesterday’s gain as crude oil weaken further. Benchmark Jan09 initially open RM65 lower at 1575, following overnight NYMEX crude oil ended almost $5 lower, after the release of government data which showed high gasoline stock level, and this made traders more worried on demand. CPO prices immediately hit intra day low of 1548 after open and gradually climb up. Nevertheless, it failed in its attempt to close yesterday’s left over gap, and hit at the intra day high of 1607 only during afternoon session. The further fall of crude oil to the level below $65 during Asian time zone, coupled with weaker Dalian soy oil had further pressured local CPO prices. News that Malaysia government may not consider to scrap windfall tax on palm oil also provided more selling pressure on the already weak market sentiment. Benchmark Jan09 then fell again, but with the emerged of last hour of short covering activities, it settled at 1599, down by RM41 from yesterday’s settlement price.