Crude palm oil futures on Malaysia’s derivatives exchange ended higher Monday, following positive leads from soyoil and crude oil, but came off highs due to expectations that exports will fall 14%-15% this month.
Weak demand in the cash market and large inventories in China also damped sentiment, trade participants said.
The benchmark November contract on the Bursa Malaysia Derivatives ended MYR28 higher at MYR2,570/ton, off an intraday high of MYR2,585.
The higher price levels couldn't be sustained because August exports are projected around 1.2 million tons, down from around 1.4 million tons last month.
Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. will issue their export estimates later this week.
Prices remained in positive territory with broad support from external markets, but briefly eased as low as MYR2,550/ton due to supply-demand conditions.
"High stockpiles of soybeans in China have affected purchases of palm oil, which may slow down further with the onset of winter," a Singapore-based executive at a global trading company said.
Most traders put immediate resistance at MYR2,580/ton.
Earlier in the day, prices rose as spillover support from outside markets prompted many investors to cover short positions.
"Crude oil's rise above $75/bbl has provided psychological support to several commodities including palm oil," said a trader in Singapore.
Speculators are pushing up prices while many hedgers are still on the sidelines ahead of the public holiday Tuesday, he said.
"The market is currently torn between prospects of both lower exports and output," another trader said.
Cash palm olein traded at $855/ton for January/February/March versus Friday's offer at $845/ton, while November/December traded at $862.50/ton, up from $855/ton, a trader in Singapore said.
Open interest on the BMD was 66,192 lots, versus 68,853 lots Friday. One lot is equivalent to 25 tons.
A total of 11,614 lots of CPO were traded versus 12,062 lots Friday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Sep'10 2,720 2,688 32 2,720 2,710 Oct'10 2,615 2,604 11 2,658 2,603 Nov'10 2,570 2,542 28 2,585 2,550 Dec'10 2,562 2,525 37 2,575 2,540 Jan'11 2,564 2,527 37 2,566 2,542
-By Sameer Mohindru, Dow Jones Newswires; +(65) 6415-4085; sameer.mohindru@dowjones.com
(END) Dow Jones Newswires
August 30, 2010 07:25 ET (11:25 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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