Crude palm oil futures on Malaysia’s derivatives exchange rose for the fourth consecutive day Friday as investors covered shorts ahead of next week’s output and export data, ignoring weak external leads.
The benchmark April CPO contract on the Bursa Malaysia Derivatives ended up MYR11, or 0.4%, at MYR2,521 a metric ton, close to an intraday high of MYR2,521/ton.
Most growers are expecting a double-digit percentage drop in Malaysia's output in January, which may continue to decline in February, said a Kuala Lumpur-based trader.
"February is a shorter month and the arrival of palm fruit bunches at the mills has been paltry so far," said a Malaysia-based exporter, adding this may ease the burden of domestic palm reserves, which rose to a 13-month high of 2.24 million tons in December.
The Malaysian Palm Oil Board will issue January output data on Wednesday. Production in December was estimated at 1.52 million tons, down 4.7% on month.
Until then, CPO futures will likely remain in consolidation, trading in a MYR2,480-MYR2,525/ton range, an analyst in Kuala Lumpur said.
March soyoil on the Chicago Board of Trade was trading 14 points lower at 37.07 cents a pound at the end of trade on the BMD.
At 1030 GMT, light, sweet crude oil on the New York Mercantile Exchange was trading 29 cents lower at $72.85 a barrel.
In the cash market, palm olein for April/May/June traded at $770/ton and $772.50/ton, July/August/September at $765/ton, said a Singapore-based trader.
Cash CPO for prompt delivery was offered MYR20 higher at MYR2,530/ton.
In other news, India's state-run PEC Ltd. has floated a tender for the import of 12,000 tons of refined, bleached and deodorized palm olein, the company said on its Web site.
The edible oil is for delivery during the last week of March at the southern ports of Chennai and Tuticorin, it said in a statement. The last date for submission of bids is Feb. 9.
Open interest on the BMD was 74,744 lots Friday, down from 77,430 lots. One lot is equivalent to 25 tons.
Some 15,199 lots of CPO were traded versus 14,814 lots Thursday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Feb 2010 2,525 2,524 Up 01 2,525 2,515 Mar 2010 2,530 2,519 Up 11 2,523 2,492 Apr 2010 2,521 2,510 Up 11 2,523 2,486 May 2010 2,519 2,501 Up 18 2,520 2,484
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(Dilip S Nag in Mumbai contributed to this article.)
(END) Dow Jones Newswires
February 05, 2010 06:21 ET (11:21 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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