Crude palm oil futures on Malaysia’s derivatives exchange ended mostly higher Friday, inspired by a likely rise in Malaysian palm exports and bullish sentiment amid by fears of weather on crops world-wide, said trade participants.
The benchmark October contract on the Bursa Malaysia Derivatives exchange ended MYR3 higher at MYR2,517 a metric ton.
Traders and shipping executives estimated Malaysia's palm oil exports reached 1.39 million-1.42 million tons in July, 3%-6% higher than the June figures issued by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. last month.
The outlook for better-than-expected exports helped CPO futures end above the psychological level of MYR2,500/ton, after prices fell 0.8% to an intraday low of MYR2,495/ton. Palm prices have now risen 7.3% since the beginning of July.
Traders are tracking the impact of adverse weather conditions in China, a major vegetable oil consumer; they may step up vegetable oil imports if unfavorable weather hurts domestic crops.
In the medium term, exports will "probably be higher from now until September as the weather pattern may force buyers to stock up," said a shipping executive based in Malaysia.
The market was also pulled up by poor output growth in the key palm-growing state of Sabah.
"Most plantations are suffering due to erratic weather conditions. Production in Sabah is probably going to be flat in July," said a senior trading executive from a Malaysia-based major plantation company that has vast tracts of palm estates in Sabah. "Some of the older palm trees aren't able to withstand the weather stress and produce fewer fruits."
In the cash market, palm olein for September was traded at $842.50/ton, free on board Malaysian ports, a Singapore-based broker said.
Cash CPO for prompt delivery was offered unchanged at MYR2,600/ton.
CME Group Inc.'s dollar-based CPO futures for October contract was trading $7.25 lower at $786/ton compared with Thursday's close at $793.25/ton at 0935 GMT.
Rupiah-denominated October CPO futures on the Indonesia Commodity and Derivative Exchange were trading 0.6% lower at IDR6,875 a kilogram at 0934 GMT.
Open interest on the BMD was 69,238 lots, versus 69,423 lots Thursday. One lot is equivalent to 25 tons.
A total of 17,260 lots of CPO were traded versus 13,047 lots Thursday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Aug'10 2,589 2,585 Up 04 2,610 2,560 Sep'10 2,538 2,542 Down 04 2,567 2,524 Oct'10 2,517 2,514 Up 03 2,539 2,495 Nov'10 2,512 2,506 Up 06 2,531 2,490
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
July 30, 2010 06:56 ET (10:56 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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