OBSERVATIONS: Weakness of the US dollar triggered sharp knee-jerk upside reactions in major world commodity markets, palm oil included.Palm oil was weak in early trade last week, falling to as low as RM1,893 a tonne, basis the actively-traded June 2009 contract.
But thanks to the sudden and precipitous drop in the US greenback against other major world currencies last week, world commodity markets overall were, all of a sudden, looking up again.
Gold for April delivery on the New York Commodity Exchange soared to US$956.20 an ounce, up US$26.10 over the week; light sweet crude oil for May delivery on the New York Mercantile Exchange, for the first time this year, closed above the psychological US$50 a barrel level, settling last week at US$52.07 a barrel. And crude palm oil for June delivery on the Kuala Lumpur commodity exchange settled last Friday at RM1,985 a tonne, up RM55 or 2.85 per cent over the week.
The US greenback was trading at its high for the year of around RM3.73 at the beginning of this month. But it was worth a tad above RM3.64 last Friday, down 2.41 percent from its 2009 high.
Not even a poor export performance thus far this month could dampen bullish investor sentiment in the local market.
Swiss export monitor Societe Generale de Surveillance put Malaysia's March 1-20 palm oil exports at 741,397 metric tonnes, down 5.6 per cent from that for the similar period last month. And Intertek Agri Services' estimate was 723,770 tonnes, lower by some 71,000 tonnes or 8.88 per cent.
Conclusion: The technicals are all bullish, suggesting that the bulls will likely gore through the RM1,995 a tonne overhead resistance level this week, putting this market firmly back on the uptrack.
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