Crude palm oil futures on Malaysia’s derivatives exchange ended higher Friday as investors covered shorts following a recovery in overnight soyoil and crude oil futures, but palm oil’s diminishing discount to soyoil and a stronger ringgit capped gains, trade participants said.
At the end of trade on the Bursa Malaysia Derivatives exchange, only 7,175 lots of CPO were traded, less than a third of the 22,873 lots traded Thursday.
The benchmark June contract on the BMD ended MYR16 higher at MYR2,559 a metric ton after trading in a narrow MYR2,550-MYR2,569/ton range during the day.
Trading was subdued as most markets in the region was closed for a holiday.
External cues such as a rise in palm oil futures on the Dalian Commodity Exchange also boosted CPO prices.
"Based on BMD Crude Palm Oil (CPO) trade in the past few trading sessions, prices seem to have formed a good support based around the MYR2,530 level, and could climb higher if favorable news for March CPO output and inventories surface," said a senior analyst from a Kuala Lumpur-based brokerage.
"The CPO bulls may want to push prices above MYR2,570/ton in the next trading session," he said.
But many among trade participants are still worried about the price premium erosion between soyoil and crude palm oil.
Palm olein's discount to soyoil has narrowed to as little as $10/ton from $100/ton in December, and may prompt buyers to switch to soyoil.
Also, the expected rise in Malaysia's palm oil output in March while exports remain less-than-spectacular may cap gains, said a Kuala Lumpur-based senior trading executive.
He added that Malaysia's March palm oil output is tipped to increase by 7%-11% on month.
"Output at our palm estates have shown single-digit increase (in March)," said Lee Oi Hian, chief executive at Malaysia-based listed plantation company Kuala Lumpur Kepong Bhd. (2445.KU).
In the cash market, palm olein for May/June shipment offered $2.50 lower at $812.50/ton.
Cash CPO for prompt delivery was offered unchanged at MYR2,600/ton.
Open interest on the BMD was 83,116 lots, up from 77,494 lots Thursday. One lot is equivalent to 25 tons.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Apr 2010 2,600 2,594 Up 06 2,607 2,593 May 2010 2,571 2,555 Up 16 2,580 2,564 Jun 2010 2,559 2,543 Up 16 2,569 2,550 Jul 2010 2,546 2,535 Up 11 2,558 2,539
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
April 02, 2010 06:12 ET (10:12 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
More Recent Palm Oil News 
- CPO Rises To Two Week High; Industry Data In Focus
- Crude Palm Oil Ends Up On Weekend Short Covering; Upside Limited
- Crude Palm Oil Recovers Late On Short Covering
- Crude Palm Oil Ends Down As Demand Prospects Weaken
- Crude Palm Oil Rises Slightly; Weak Demand Limits Upside
- Crude Palm Oil Ends Up On South America Crop Worries
- Crude Palm Oil Rises On Pre-Holiday Short-Covering
- Crude Palm Oil Falls Due To Bearish Export Outlook
- Crude Palm Oil Ends Higher On South America Weather
- Crude Palm Oil Ends Down On Profit Taking; USDA Report In Focus
- Crude Palm Oil Rises In Light Trade; USDA Data In Focus
- Crude Palm Oil Steady; South America Weather May Underpin
- Crude Palm Oil Ends Up In Light Trade; Fresh Cues Awaited
- Crude Palm Oil Ends Up On Weather Concerns; More Gains Likely
- Crude Palm Oil Ends Down On Profit Taking, Europe Worries
PRO Palm Oil Live Market News
- China Dalian Commodity Exchange Grain Stocks, Feb 09
- BMD Crude Palm Oil (CPO) Rebounds But Higher Stocks Cap Gains
- China Dalian Grain Futures Closing Prices, Volume
- Malaysian AM Cash Market Prices For Palm Oil – Feb. 9
- BMD Crude Palm Oil (CPO) Falls With Other Commodities; Stocks Weigh
- BMD Crude Palm Oil (CPO) Slips In Choppy Trade; MYR3,120 Support
- BMD Crude Palm Oil (CPO) Tipped To Open Up But Upside Limited
- Asia-Pacific Commodities Events Calendar
- Southeast Asia Palm Oil Weather – Feb 8
- European Veg Oil PM Palm Oil & Lauric Oil Prices – Feb 8
- European Veg Oil AM Palm Oil & Lauric Oil Prices – Feb 8
- India Commodity Prices Including Palm Oil – Agriculture
- CPO Rises To Two Week High; Industry Data In Focus
- Indonesia PT KPB Sells 6,500 Tons Crude Palm Oil (CPO) At Auction Wednesday
- Malaysian PM Cash Market Prices For Palm Oil – Feb. 8
