KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives
exchange rose 3.4% Thursday due to the bleak picture of the soybean crop in
Argentina, bullish forecast by a Hamburg-based analyst, short covering and on
support from crude oil, said trade participants.

  The benchmark April contract on the Bursa Malaysia Derivatives, which had
been trading in a narrow range of MYR1,822-MYR1,840, quickly rose in the
afternoon session as much as 4% from the previous close to MYR1,881 a metric
ton on news of the analyst's comments, before ending MYR61 higher at
MYR1,870/ton.

  During the electronic session on the Chicago Board of Trade, March soyoil
rose as much as 54 points to 34.49 cents a pound.

  "At least 1.0 million hectares of the intended Argentine soybean area will
not be planted this year, which alone will result in a soybean crop loss of
around 2.5 million tons," Siegfried Falk, co-editor of industry journal Oil
World, told Dow Jones Newswires.

  Falk said in the event of a dry February, Argentina's soybean production
could even fall below 45 million tons. Forecasts have already fallen to between
45 million and 46 million tons from earlier projections of 49 million-50
million tons.

  Argentina's Agriculture Secretariat has cut its forecast for 2008-09 soybean
area to 16.5 million hectares from the last month's forecast of 17.8 million
hectares.

  The latest projections show problems with Argentina's crop are deeper than
expected earlier, said a trading executive in Kuala Lumpur.

  He said CPO is likely to trade between MYR1,800-MYR2,000/ton in the near
term.

  However, Falk said crude palm oil prices may rise above MYR2,000/ton again in
the next couple of months, supported by a slowdown in production.

  Early last month, when CPO was around MYR1,450/ton, Falk correctly predicted
a rebound to MYR2,000/ton and above. The benchmark BMD CPO futures contract
reached MYR2,058/ton in the first week of January.

  Traders said ahead of the upcoming holidays, many among them are covering
their short positions and some are even setting up fresh long positions.

  Open interest in CPO on the BMD was 86,715 lots, up from 86,377 lots
Wednesday. Traded volume was 12,483 lots, up from 12,019 lots. One lot
comprises 25 tons.

  Cash CPO for prompt shipment was last offered MYR50 higher at MYR1,875/ton.

 Closing BMD CPO futures prices in MYR/ton at 1000 GMT:

Month      Close    Previous   Change   High    Low
Feb 09     1,880    1,820      Up 60    1,883   1,836
Mar 09     1,870    1,819      Up 51    1,880   1,828
Apr 09     1,870    1,809      Up 61    1,881   1,822
May 09     1,875    1,800      Up 75    1,879   1,822