Malaysian palm oil futures hit a new 27-month high on Monday on concern heavy rains may affect palm oil yields and a weak dollar trend lent support.
The dollar has come under pressure against most major currencies as the market anticipates the US Federal Reserve will step up money printing after its policy meeting on Tuesday and Wednesday.
Benchmark Malaysian crude palm oil futures rose as much as 1.2 percent to 3,098 Malaysian ringgit ($1,002) per tonne -- a level unseen since July 28. 2008 and a touch below a key resistance level.
The contract ended at 3,092 ringgit. Overall traded volume stood at 14,307 lots of 25 tonnes each, down from the usual 10,000 lots.
"Exposure to heavy rains could bring down yield quality in palm fresh fruits and that could support the market," said a trader with a foreign commodities broker. "Also, the replanting scheme may help. We could see prices go above 3,100 ringgit."
Reuters technical analysis showed palm oil is expected to consolidate between 3,040 ringgit to 3,100 ringgit per tonne for one trading session, before either rising towards $3,194 ringgit or falling towards 3,010 ringgit.
A top Malaysian industry official said the government will carry out new scheme to replant 365,000 hectares of oil palms older than 25 years to lift flagging output.
But exports appear to be lagging. Shipments of Malaysian palm oil products for October fell 8.5 percent to 1,354,128 tonnes from 1,479,602 tonnes shipped in September, cargo surveyor Intertek Testing Services said on Monday.
Another cargo surveyor Societe Generale de Surveillance said October exports fell 12 percent.
In Asian trade hours, US soyoil for December delivery rose 1.1 percent ahead of a US Federal Reserve policy meeting this week expected to announce a second round of monetary easing and strength in soybeans underpinned by rising Chinese demand.
The most active September 2011 soyoil on China's Dalian Commodity Exchange gained 1.2 percent.
