Crude palm oil futures on Malaysia’s derivatives exchange rose 1.8% Thursday, recovering from recent losses as investors covered shorts aggressively, taking cues from an increase in soyoil and crude oil futures ahead of a speech by a leading vegetable oils analyst.
The benchmark November contract on the Bursa Malaysia Derivatives ended MYR44 or 1.8% higher at MYR2,530 a metric ton, the high end of an intraday range of MYR2,489-MYR2,530.
Traders said expectations that Malaysia's palm oil exports for August may reach only 1.1 million-1.25 million tons, much lower than July's exports of 1.47 million tons, have been factored into prices.
"The slow pace of export shipments remains a dampener, but after three days of selling, investors are taking leads from external markets," a Kuala Lumpur-based executive at a global trading company said.
Demand in the physical market has been rather active today, and the possibility that vegetable oils analyst Dorab Mistry could give a bullish view of palm oil's supply-and-demand fundamentals later in the evening added to the bullish tone from the petroleum and soyoil markets, he said.
Some trade participants said the downside potential for prices is also limited because "the market is oversold and technical charts indicate prices may rebound to MYR2,600/ton in the next trading session," a Singapore-based trading executive said.
In the cash market, palm olein for October was traded at $880/ton and $877.50/ton, November/December at $830/ton, $837.50/ton and $845/ton. January/February/March was traded at $830/ton and $832.50/ton, free on board Malaysian ports, a Singapore-based physical market broker said.
CME Group Inc.'s dollar-based November CPO futures were trading at $798.75/ton at 1030 GMT, up $7.25 from Wednesday's close.
Rupiah-denominated October CPO futures on the Indonesia Commodity and Derivative Exchange were 0.6% higher at IDR7,365 a kilogram at 1029 GMT.
Open interest on the BMD was 68,428 lots, versus 68,654 lots Wednesday. One lot is equivalent to 25 tons.
A total of 17,790 lots of CPO were traded versus 29,218 lots Wednesday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Sep'10 2,668 2,640 Up 28 2,669 2,640 Oct'10 2,573 2,541 Up 32 2,573 2,541 Nov'10 2,530 2,486 Up 44 2,530 2,489 Dec'10 2,516 2,468 Up 48 2,516 2,469
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
August 26, 2010 07:16 ET (11:16 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
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