IS THERE CORRELATION BETWEEN OIL AND PALM OIL?

.....Other than the fact that Palm also ends in Oil? In Brazil at least, when farmers started to use Sugar for ethanol (cars there are powered by sugarcane ethanol), they were able to get a higher price for their sugar feedstocks. In fact, in his book "Hot Commodities", Jim Rogers has said that
In the USA, the use of Corn for ethanol has caused the price of the crop to go up, and affected other industries which use corn as feedstock, as well as a rise in rail stocks (which transport the ethanol). So when Palm Oil may also be used for Ethanol, it makes sense that the price of Palm Oil should track the price of Oil. I've decided to check this out and put together the charts of USO (the Oil ETF) and the spot price of Palm Oil (trade on the KL's MDEX). Here's the result.






















Today(Firday, Oct 26), as Oil briefly topped US$91 per barrel, CPO futures (Dec) touched RM2,819. (so there was correlation today). I'll have to watch this really close, as it could make trading in Palm Oil much easier. We can trade USO through Options, but Palm Oil has to be traded through Futures. This makes it extremely important to know what you are doing with Palm Oil, since you can literally lose everything (and more)! Beware of Gaps.....

Chief Shook