Crude palm oil futures on Malaysia’s derivatives exchange ended higher Wednesday tracking positive crude oil and soyoil futures in after-hours trade.
However, a lack of fresh local cues prevented CPO prices from breaking the MYR2,600 resistance, prompting sluggish, rangebound trade.
The benchmark June contract on Bursa Malaysia Derivatives ended MYR26 higher at MYR2,595 a metric ton, after trading in a MYR2,576-MYR2,600 range.
Higher soyoil futures in the morning prompted CPO prices to rise to MYR2,600 but the market's inability to break that resistance level prompted sluggish trade for the rest of the day, said traders.
"CPO prices barely moved today and there were hardly any trades on the cash market," said a Kuala Lumpur-based trader.
By the end of trade on the BMD, May soyoil on the electronic Chicago Board of Trade was up 20 points at 39.57 cents a pound.
May Brent crude on London's ICE Futures exchange was up $0.77 at $81.30 a barrel.
Foremost on many participants' minds were fears that palm oil's discount to rival soyoil is diminishing, and this prevented CPO prices from breaking out of rangebound trade.
Palm oil used to average $70-$100/ton less than soyoil, and around such levels it was seen as a cheap alternative to soyoil, said another Kuala Lumpur-based trader.
However, the trader added the discount has since fallen to $10/ton, with fears that palm oil may soon outstrip soyoil.
"That's making it hard for CPO prices to rise, as the market fears higher CPO prices would result in importers switching to soyoil," said the trader.
The trader added India would be the market most likely to switch to soyoil should the discount fall even lower.
India is one of Malaysia's largest buyers of CPO.
In the cash market, palm olein for July/August/September traded at $805/ton, an executive from a Singapore-based commodities brokerage said.
Cash CPO for prompt shipment was offered MYR25 higher at MYR2,630/ton.
Open interest on the BMD was 84,059 lots Wednesday, up from 82,648 lots Tuesday. One lot is equivalent to 25 tons.
A total of 15,515 lots of CPO were traded versus 20,774 lots Tuesday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Apr 2010 2,624 2,605 Up 19 2,627 2,611 May 2010 2,605 2,586 Up 19 2,612 2,590 Jun 2010 2,595 2,569 Up 26 2,600 2,576 Jul 2010 2,583 2,553 Up 30 2,590 2,573
-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277; fawziah.selamat@dowjones.com
(END) Dow Jones Newswires
March 17, 2010 06:50 ET (10:50 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
More Recent Palm Oil News 
- 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
- CPO Ends Unchanged; May Slip Toward MYR3,200 After Recent Rally
PRO Palm Oil Live Market News
- European Veg Oil PM Palm Oil & Lauric Oil Prices – Feb 3
- European Veg Oil AM Palm Oil & Lauric Oil Prices – Feb 3
- India Edible Oil Prices Down On New Crop Arrival, Strong Rupee
- India Commodity Prices Including Palm Oil – Agriculture
- Crude Palm Oil Ends Up On Weekend Short Covering; Upside Limited
- Malaysian PM Cash Market Prices For Palm Oil – Feb. 3
- Indonesia Eyes Lower Pakistan CPO Duty, Adds Trade Path To Central Asia
- China Soybean Futures Retreat From 12-Week High On Profit Taking, Argentina Rains
- Malaysia Cash Palm Olein Prices Slip On Tepid Demand
- China Dalian Commodity Exchange Grain Stocks, Feb 03
- China Dalian Grain Futures Closing Prices, Volume
- BMD Crude Palm Oil (CPO) Futures Lower Midday; May Fall More
- Malaysian AM Cash Market Prices For Palm Oil – Feb. 3
- Malaysia May Reform CPO Export Tax Structure -Report
- BMD Crude Palm Oil (CPO) Futures Steady; To Remain Rangebound
