Monday, March 22, 2010

Crude Palm Oil Ends Down Amid Conflicting Export Data

Crude palm oil futures on Malaysia’s derivatives exchange ended mostly lower Monday in volatile trade spurred on by conflicting export estimates, said trade participants.

The benchmark June contract on the Bursa Malaysia Derivative exchange ended down MYR7 at MYR2,570 a metric ton after trading in a range of MYR2,554-MYR2,594/ton.

Conflicting estimates released by cargo surveyors SGS (Malaysia) Bhd. and Intertek Agri Services on Malaysia's March 1-20 palm oil exports prompted bulls and bears to battle it out in the market.
Over the weekend, Intertek estimated exports were up 3.4% on month at 873,931 tons, just a little over market expectations of 873,000 tons.

The news provided some support for CPO prices and allowed bulls to push the thin market trade into positive territory despite crude oil prices falling below the crucial $80 a barrel psychological barrier during Asian trading hours today.

However, estimates by SGS prompted the bears to come out in full force.

The surveyor's data showed exports during March 1-20 fell 2.4% on month to 844,474 tons.
Depending on which data participants preferred to follow, CPO prices began trading in a volatile manner, see-sawing between positive and negative territory.

"The bears won in the end, as there are fears that production is up, perhaps by 5%-10%, and this may push up end-March stock levels," said a Kuala Lumpur-based trader.

In the cash market, palm olein for July/August/September traded at $800/ton, said an executive from a Singapore-based commodities brokerage.

Cash CPO for prompt shipment was offered unchanged at MYR2,630/ton.

Open interest on the BMD was 79,157 lots Monday, down from 81,225 lots Friday. One lot is equivalent to 25 tons.

A total of 12,691 lots of CPO were traded versus 15,432 lots Friday.

Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT: 

Month      Close    Previous   Change    High    Low
Apr 2010   2,635    2,620      Up 15     2,637   2,592
May 2010   2,590    2,583      Up 07     2,610   2,568
Jun 2010   2,570    2,577      Dn 07     2,594   2,554
Jul 2010   2,558    2,565      Dn 07     2,580   2,544 
-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;

(END) Dow Jones Newswires

March 22, 2010 06:52 ET (10:52 GMT)

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