Crude palm oil futures on Malaysia’s derivatives exchange ended up Thursday on speculative buying interest amid higher demand for the commodity and a rally on other agricultural bourses.
The benchmark October contract on the Bursa Malaysia Derivatives exchange ended MYR29 or 1.1% higher at MYR2,619 a metric ton after rising to MYR2,623/ton, its highest level since March 15.
With palm stocks likely to rise even less than production or remain flat due to rising festival-season demand, some investors covered their shorts, trade participants said.
Rising Asian festival demand amid concerns that erratic weather may hurt palm crop development may buoy prices of CPO in the next few weeks, an executive from a Malaysia-based plantation company said.
"CPO could rise to MYR2,700…A strengthening La Nina could cause heavier monsoons towards the end of the year in Malaysia," he said.
Palm prices have risen 2% so far this month, as concerns about a La Nina weather pattern, usually associated with heavier rainfall in Southeast Asia and drier weather in soybean growing areas in the U.S. and South America, sustained the market.
Lingering concerns about the drought in the Black Sea region, which has spread support to world grains prices, also drove prices of palm oil and soyoil higher, said S. Paramalingam, executive director at Kuala Lumpur-based brokerage Pelindung Bestari Sdn. Bhd.
CME Group Inc.'s dollar-based CPO futures for the October contract were trading $15.50 higher at $828.50/ton at 1049 GMT, compared with Wednesday's close of $813/ton.
Rupiah-denominated October CPO futures on the Indonesia Commodity and Derivative Exchange were trading 0.6% higher at IDR7,165 a kilogram at 1000 GMT.
Open interest on the BMD was 67,272 lots, versus 68,584 lots Wednesday. One lot is equivalent to 25 tons.
A total of 17,144 lots of CPO were traded versus 13,150 lots Wednesday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Aug'10 2,700 2,675 Up 25 2,702 2,650 Sep'10 2,645 2,632 Up 13 2,656 2,608 Oct'10 2,619 2,590 Up 29 2,623 2,571 Nov'10 2,613 2,585 Up 28 2,614 2,564
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
August 05, 2010 07:20 ET (11:20 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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