Crude palm oil futures on Malaysia’s derivatives exchange ended higher Tuesday with the rise in crude oil prices and bullish local fundamentals prompting investors to cover shorts, trade participants said.
The benchmark September contract on the Bursa Malaysia Derivatives exchange ended MYR13 or 0.6% higher at MYR2,353 a metric ton after moving in a MYR2,325-MYR2,354 range.
Export shipments are gaining momentum and this may support the market, said a Kuala Lumpur-based executive at an international trading company.
Cargo surveyor Intertek Agri Services estimated Malaysia's palm oil exports during the July 1-10 period rose 9% to 474,928 tons, while another surveyor put exports in the same period at 460,343 tons.
Many among trade participants said selling pressure over the past few weeks and lower palm inventory levels have reduced the downside potential for prices for now, with strong support for prices around MYR2,280-MYR2,300/ton.
But if soyoil futures continue to decline later on the CBOT, it will have a spillover impact on palm oil, said a Kuala Lumpur-based analyst.
December soyoil was trading 12 points lower at 38.24 cents a pound by the end of trade on the BMD.
Short-term forecasts by analysts point to lower palm oil prices over the next few months despite a bullish crop report by the Malaysian Palm Oil Board as production is expected to recover and may rise to a peak in the September-November period.
"We believe the shortfall in palm production could be a reflection of the general shortage of foreign workers in Malaysia, which resulted in lower-than-expected yields. Output should recover seasonally in the next few months," Tan Ting Min, an analyst at Credit Suisse Malaysia, said.
Despite the weak growth in June production, a double-digit rise in output this month would probably mean inventory levels may reach higher levels at end-July, analysts and plantation company executives said.
In the cash market, palm olein for September shipment was traded at $765/ton, and for October/November/December at $757.50/ton, free on board Malaysian ports, said a Singapore-based trading executive.
Cash CPO for prompt delivery was offered MYR10 lower at MYR2,430/ton.
CME Group Inc.'s dollar-based CPO futures contract and the rupiah-denominated September CPO futures on the Indonesia Commodity and Derivative Exchange weren't traded during Asian hours.
Open interest on the BMD was 72,201 lots, versus 73,512 lots Monday. One lot is equivalent to 25 tons.
A total of 12,376 lots of CPO were traded versus 15,227 lots Monday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Jul'10 2,450 2,440 Up 10 2,450 2,438 Aug'10 2,395 2,384 Up 11 2,398 2,375 Sep'10 2,353 2,340 Up 13 2,353 2,325 Oct'10 2,335 2,321 Up 14 2,335 2,310
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
July 13, 2010 06:36 ET (10:36 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
More Recent Palm Oil News 
- Palm Oil Ends Up Higher On Lower Output, Soyoil
- CPO Ends Up On Short Covering; Rising Stocks Cap Gains
- Crude Palm Oil Ends Off Lows On Bargain-Hunting
- Crude Palm Oil Ends Off Highs On Likely Fall In Exports
- Malaysia August Palm Oil Exports Likely Down 14%-15% On Month
- Crude Palm Oil Ends Up On Soyoil, Bullish Forecast
- Analyst Mistry: Palm Oil Prices “Must Rise” To Ration Demand
- Crude Palm Oil Rises 1.8% On Aggressive Short Covering, Soyoil
- Crude Palm Oil Ends 1% Lower On Weak Aug 1-25 Export Data
- CPO Ends Down 2% On Likely Fall In Exports; May Fall More
- Crude Palm Oil Ends Down; Falling Demand, Rising Output
- Crude Palm Oil Ends Lower;Likely Higher Exports Cap Fall
- CPO Falls On Soyoil; Bad Weather In Indonesia May Support
- Crude Palm Oil Ends Down; Stocks To Rise As Exports Fall
- Crude Palm Oil Ends Lower; Price Correction Seen Timely
PRO Palm Oil Live Market News
- China Soybean Futures Marginally Up, Lose Momentum On Supply
- China Dalian Grain Futures Closing Prices, Volume
- Malaysian Cash Market Prices For Palm Oil – Sep 7
- India Soybean Futures Steady; May Gain On Data
- BMD Crude Palm Oil (CPO) Futures Unchanged Midday; Upside Limited
- BMD Crude Palm Oil (CPO) Futures Little Changed In Thin Trade
- India Soy Futures Likely Steady; May Fall Later
- CPO Futures May Get Only Limited Soyoil Support
- BMD Crude Palm Oil (CPO) Futures To Open MYR15-MYR25 Lower
- Southeast Asia Palm Oil Weather – Sep 6
- Southeast Asia Palm Oil Weather – Sep 6
- Southeast Asia Palm Oil Weather – Sep 6
- Southeast Asia Palm Oil Weather – Sep 6
- European Veg Oil PM Palm Oil & Lauric Oil Prices – Sep 6
- India Commodity Prices Including Palm Oil – Agriculture
