A forecast of a slump in Malaysian palm oil production helped palm oil prices to a strong finish to 2009, while Chicago markets remained little changed in early deals.

Benchmark March palm oil jumped 2.7% to 2,666 ringgit a tonne in Kuala Lumpur, the highest for seven months, after the Malaysian Palm Oil Board forecast a strong market in 2010.

"Crude palm oil prices will be OK next year," Sabri Ahmad, MPOB chairman, told the New Straits Times, forecasting they would trade in a range of 2,300-700 ringgit a tonne.

The forecast reflected expectations of "steady global demand, tree stress and a possible resurgence of the El Nino", a disruptive weather pattern associated with elevated Pacific water temperatures.

"[Palm] fruit production is expected to drop 20% due to tree stress and this will be a boon to crude palm oil prices," Mr Sabri said.

The board is the industry regulator for Malaysia, the world's second biggest palm producing state, after Indonesia.

Dollar eases

Even though palm prices retreated a touch to 2,652 ringgit a tonne by 08:15 GMT, palm's performance far bettered that of Chicago crops, which remained little changed in Asian trading hours.

The dollar helped by easing a touch to stand near $1.44 against the euro, more than 1 cent lower than its strongest on Wednesday.

Soybeans added 4.25 cents to $10.40 ½ a bushel for January delivery, with the better-traded March lot up 6.25 cents at $10.50 ¾ a bushel.

Wheat for December added 2.5 cents to $5.47 ¼ a bushel, with December corn up 0.5 cents at $4.14 ½ a bushel.

Fat finger? 

Some debate is still raging over the slump of 12% in corn's price in a minute on Wednesday thanks to a large and sudden sell order.

Was it a "fat finger" error, in which operator error expands the size of an order, or was something else afoot?

"Traders estimate between 5,000-6,000 contracts were sold during the sell-off," Kevin Kjorsvik at broker Benson Quinn Commodities said.

"The steep drop probably occurred due to an order entry error, although, one analyst suggested that a fund was booking profits for year end.

"While funds aren't noted for their execution, I'm leaning towards the first theory since Mr Bean couldn't even have botched the execution of an order that poorly."