Crude palm oil futures on Malaysia’s derivatives exchange ended higher Friday in thin trade as market participants shrugged off weak export demand and focused on gains in regional equities, covering short positions ahead of the Lunar New Year holiday.
The benchmark April contract on Bursa Malaysia Derivatives ended up 0.3% at MYR3,165 a metric ton after moving in a narrow range of MYR3,137-MYR3,183/ton.
"While supportive headlines from Europe helped to lift sentiment, investors weren't keen to hold on to positions ahead of the long weekend and chose to cover shorts," a trading executive at a Kuala Lumpur-based foreign brokerage said.
The BMD will be closed Monday and Tuesday for the holiday. It will reopen Wednesday.
Palm oil prices are down 1.9% since the beginning of the year and could fall further as slowing export demand may leave end-month stocks above the psychologically important level of 2 million tons.
Cargo surveyor Intertek Agri Services said Jan. 1-20 palm oil shipments fell 14% from the previous month to 799,210 tons. Another surveyor, SGS (Malaysia) Bhd., put exports at 782,048, a decline of 15%.
Sharp price movements aren't likely next week due to the holiday in China, a major vegoil consumer, unless there is a major development in the euro-zone debt crisis, an analyst in Kuala Lumpur said.
In the cash market, refined palm olein for March shipment was offered at $1,070/ton, and April/May/June shipments were offered at $1,065/ton, free on board Malaysian ports, a physical market broker in Singapore said.
Cash CPO for prompt shipment was offered MYR5 higher at MYR3,170/ton.
Open interest on the BMD was 111,279 lots, versus 114,285 lots Thursday. One lot is equivalent to 25 tons.
A total of 13,053 lots of CPO were traded versus 25,812 lots Thursday.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Feb'12 3,163 3,165 -2 3,181 3,166 Mar'12 3,162 3,164 -2 3,185 3,160 Apr'12 3,165 3,157 +8 3,183 3,154 May'12 3,152 3,149 +3 3,174 3,148
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
January 20, 2012 05:49 ET (10:49 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.
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