Crude palm oil futures on Malaysia’s derivatives exchange ended mostly higher Thursday, as investors took cues from gains in soyoil and crude oil prices and covered short positions, helping the market reverse intraday losses it sustained due to a forecast rise in inventories.
The benchmark November contract on the Bursa Malaysia Derivatives ended MYR7 higher at MYR2,542 a metric ton after moving in a MYR2,529-MYR2,548/ton range.
End-August inventory levels likely outstripped previous forecasts of around 1.5 million tons as Indonesian exporters moved cargoes to Malaysia ahead of an increase in Indonesia's palm oil export tax, shipping executives and traders told Dow Jones Newswires.
They estimated that shipments from Indonesia, the world's largest palm oil producer, rose to around 100,000 tons from normal monthly levels of around 20,000-50,000 tons. The country doubled its palm oil export tax to 6% Monday.
The BMD dipped into negative territory following the news, but rebounded due to positive leads from external markets, a Singapore-based trading executive said.
"The market would have traded lower if not for soyoil and crude providing support."
Chicago Board of Trade December soyoil was trading 16 points higher at 40.28 cents a pound at the end of trade on the BMD, while Nymex crude for October delivery was 28 cents higher at $74.19 a barrel.
In the cash market, palm olein for delivery in November and December traded at $840/ton, $842.50/ton and $845/ton, while January/February/March olein changed hands at $837.50/ton, a Singapore-based physical market broker said.
Cash CPO for prompt shipment was offered MYR30 higher at MYR2,710/ton.
CME Group Inc.'s dollar-based November CPO futures were trading $10.25 higher at $813/ton at 1025 GMT.
Rupiah-denominated October CPO futures on the Indonesia Commodity and Derivative Exchange were 0.6% lower at IDR7,465 a kilogram at 1025 GMT.
A total of 16,794 lots of CPO were traded on the BMD compared with 15,539 lots Wednesday, while open interest was 66,548 lots versus 66,585 lots. One lot is equivalent to 25 tons.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Sep'10 2,690 2,695 Dn 5 2,697 2,675 Oct'10 2,593 2,590 Up 3 2,599 2,584 Nov'10 2,542 2,535 Up 7 2,548 2,529 Dec'10 2,535 2,524 Up 11 2,539 2,520
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
September 02, 2010 07:07 ET (11:07 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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