Friday, March 19, 2010

Asian Crude Palm Oil Ends Up; March 1-20 Exports Expected To Rise

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Friday amid expectations of higher exports and consolidation of prices ahead of the weekend, said trade participants.

The benchmark June contract on the Bursa Malaysia Derivatives ended MYR42 higher at MYR2,577 a metric ton, after trading in a MYR2,536-MYR2,580 range.

"Much of the upward momentum came after prices broke through the resistance level of MYR2,550," said a Kuala Lumpur-based trader.

"The market is struggling to decide whether prices should be above or under MYR2,550, and today the bulls won," he added.

The bulls were aided by news that Malaysia's March 1-20 exports may be higher on month.
Expectations are for exports to be in the range of 850,000-873,000 tons, with market participants veering towards the higher estimate towards the market close.

During the same period last month, cargo surveyor Intertek Agri Services estimated exports at 844,865 tons while another cargo surveyor, SGS (Malaysia) Bhd., estimated exports at 865,593 tons.

Data for March 1-20 exports are likely to be released by Monday.

Bears, however, feel the increase in exports is too small to negate negative cues such as higher production and rising end-month level stocks.

A Singapore-based trader said production in March will likely be up 5%-10%, while end-March stocks may rise above 2 million tons.

In the cash market, palm olein for July/August/September traded at $802.50/ton, an executive from a Singapore-based commodities brokerage said.

Cash CPO for prompt shipment was offered MYR50 higher at MYR2,630/ton.
Open interest on the BMD was 81,225 lots Friday, down from 81,232 lots Thursday.

One lot is equivalent to 25 tons.

A total of 15,432 lots of CPO were traded versus 21,730 lots Thursday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 

Month      Close    Previous   Change    High    Low
Apr 2010   2,620    2,569      Up 51     2,620   2,576
May 2010   2,583    2,550      Up 33     2,592   2,548
Jun 2010   2,577    2,535      Up 42     2,580   2,536
Jul 2010   2,565    2,530      Up 35     2,568   2,526 
-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;

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