Crude palm oil futures on Malaysia’s derivatives exchange ended lower Thursday amid fresh concerns of a Greek debt default but declines were limited by increasing weather worries about Brazil’s soy crop.
The benchmark May contract on the Bursa Malaysia Derivatives exchange ended MYR11 lower at MYR3,190 a metric ton after moving in a MYR3,169-MYR3,202 range.
March soyoil on the Chicago Board of Trade was trading 0.9% lower at 52.87 cents a pound by the end of trade on BMD.
"The market eased a tad on profit-taking in view of bearish macro cues," a trading executive at a foreign trading house said. "Based on technical cues, palm oil still has some upside momentum but it needs to break out from MYR3,200 to spur more buying."
Market participants have been keeping a close watch on soybean output in South America as any crop damage may see buyers substituting soyoil demand with palm oil, which could reverse a 1.1% drop in CPO prices so far this year.
Refined palm olein from Malaysian ports is now offered close to a discount of $100/ton to rival soyoil from Argentina, according to physical market data.
"CPO prices are likely to be sustained beyond the January-March low output season" on expectations for lower yields as oil palm trees rest after strong production in 2011, JP Morgan said in a note.
The investment bank raised average CPO prices to MYR3,200/ton from a previous forecast of MYR2,850/ton.
In the cash market, refined palm olein for February/March shipment was offered $5 lower at $1,087.50/ton while cash CPO for prompt shipment was offered MYR10 higher at MYR3,170/ton.
Open interest on the BMD was 126,571 lots, versus 126,857 lots Wednesday. One lot is equivalent to 25 tons.
A total of 28,879 lots of CPO were traded versus 23,479 lots Wednesday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Mar'12 3,175 3,180 -5 3,185 3,151 Apr'12 3,186 3,197 -11 3,198 3,166 May'12 3,189 3,201 -12 3,202 3,169 Jun'12 3,187 3,200 -13 3,197 3,168
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
February 16, 2012 05:59 ET (10:59 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.
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