Crude palm oil futures on Malaysia’s derivatives exchange rose marginally, extending its run for a seventh day on short covering and bullish supply-demand data.
The benchmark April CPO contract on the Bursa Malaysia Derivatives ended MYR2 higher at MYR2,563 a metric ton, after spending most of the two sessions trading sideways.
Data released Wednesday by the government-linked Malaysian Palm Oil Board showed lower palm oil output and inventory levels for January, lifting prices despite selling pressure in external markets, trade participants said.
"While the January data fell within market expectations, most investors are expecting February's output to be lower by 15%-18%," and that helped to keep prices in positive territory, said S Paramalingam, executive director at Kuala Lumpur-based brokerage Pelindung Bestari Sdn Bhd.
Palm oil inventories declined to 2.0 million tons in January, with output falling to a nine-month low at 1.32 million tons, MPOB said in its monthly report.
Many traders said the bullish MPOB data, which had been widely anticipated before its release, had already been factored into prices Tuesday, when the market rose to an intraday high of MYR2,570, its highest level since Jan. 12.
MPOB also reported that CPO exports had risen 19.4% to 1.46 million tons in January.
Cargo surveyors Intertek Agri Services put Feb. 1-10 exports at 370,727 tons, up 5.4% on month. Another surveyor, SGS (Malaysia) Bhd., put exports at 410,459 tons.
Palm oil prices may stay in a MYR2,500-MYR2,600/ton range for the next two weeks as lower output in February should mean tighter palm oil stocks, a trading executive at a Kuala Lumpur-based commodities brokerage said.
March soyoil futures on the Chicago Board of Trade traded lower during Asian trading hours as the U.S. Department of Agriculture report released Tuesday failed to lift the market, traders said.
March soyoil fell as much as 39 points to 37.99 cents a pound on e-CBOT. The March contract was trading 21 points lower at 38.17 cents/pound by the end of trade on BMD.
The USDA projected 2009-10 soybean ending stocks of 210 million bushels, down 35 million from the January estimate of 245 million, but it raised Brazil's soybean production for Brazil at 66 million tons, up 1 million tons from last month due to higher yields.
In the cash market, palm olein for April/May/June traded at $780/ton, $782.50/ton and $780/ton, said a Singapore-based trader.
Cash CPO for prompt shipment was offered unchanged at MYR2,580/ton.
Open interest on the BMD was 77,648 lots Wednesday, up from 76,079 lots. One lot is equivalent to 25 tons.
Some 11,661 lots of CPO were traded versus 15,505 lots Tuesday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Feb 2010 2,570 2,560 Up 10 2,570 2,565 Mar 2010 2,565 2,561 Up 04 2,571 2,560 Apr 2010 2,563 2,561 Up 02 2,566 2,553 May 2010 2,555 2,555 Unchanged 2,561 2,546
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
February 10, 2010 05:54 ET (10:54 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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