CRUDE PALM OIL ENDS DOWN ON PROFIT-TAKING, SOYOIL

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Tuesday as investors took cues from weaker soyoil to book profits, said trade participants.

Prices briefly fell below MYR2,600 a metric ton in afternoon trade but came off their lows as a likely fall in February palm oil output lent support.

The benchmark May CPO contract on the Bursa Malaysia Derivatives ended MYR18 or 0.7% lower at MYR2,612/ton after moving in both positive and negative territory.

Before the end of trade on BMD, a Hong Kong-based trading executive said prices would likely end above the MYR2,600-MYR2,610/ton level.

“Most market participants, including the speculators, have taken on a bullish stance ahead of a positive price outlook by vegetable oil analysts next week,” said S. Paramalingam, executive director at brokerage Pelindung Bestari Sdn. Bhd.

He said CPO futures may remain rangebound ahead of next week’s industry conference beginning March 8.

With February output expected to be lower, prices may rise over the next few trading sessions,” said a trading executive from Singapore.

Palm oil output in Malaysia and Indonesia has been tapering off as oil palm trees go into a low-output cycle.

Malaysia’s palm oil inventories eased from a 13-month high of 2.24 million tons in December to 2.0 million tons in January.

Palm oil reserves may have eased further, as output in February may have declined by 10%, according to plantation company officials and trading executives.

External cues like soyoil and crude oil futures continued to influence palm oil prices.

May soyoil on the Chicago Board of Trade was trading 8 points lower at 39.82 cents a pound on e-CBOT by the end of trade on the BMD.

Light, sweet crude on the New York Mercantile Exchange was trading 2 cents lower at $78.68 a barrel at 1015 GMT.

Cash CPO prices were offered MYR25 lower at MYR2,625/ton.

In the cash market, RBD palm olein for July/August/September was traded at $795/ton and March shipment at $805/ton, said a Singapore-based broker.

Open interest on the BMD was 82,710 lots Tuesday, up from 82,428 lots Monday. One lot is equivalent to 25 tons.

Some 11,872 lots of CPO were traded versus 15,974 lots Monday.

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

Month      Close    Previous   Change    High    Low
Mar 2010   2,621    2,639      Down 18   2,632   2,603
Apr 2010   2,619    2,637      Down 18   2,642   2,607
May 2010   2,612    2,630      Down 18   2,635   2,597
Jun 2010   2,597    2,617      Down 20   2,614   2,585

(END) Dow Jones Newswires

March 02, 2010 05:53 ET (10:53 GMT)