The benchmark June contract on the Bursa Malaysia Derivatives exchange ended MYR25 higher at MYR2,545 a metric ton after trading in MYR2,501-MYR2,548/ton range.
Prices rebounded when the afternoon trading session resumed, as the rise in crude oil prices cushioned the fall in CPO futures, a Singapore-based exporter said.
Light, sweet crude oil for May delivery rose as much as 57 cents to $82.74 a barrel during Asian trading hours. The May contract was unchanged at $82.17/bbl at 1002 GMT.
Malaysia's March palm oil exports will likely rise by 11%-12% to around 1.35 million tons, said a Kuala Lumpur-based trading executive.
For February, cargo surveyor Intertek Agri Services estimated exports at 1.21 million tons while SGS (Malaysia) Bhd. put shipments at 1.25 million tons.
"While this is positive for the market, participants are still maintaining a cautious stance on an expected rise in palm oil imports from Indonesia (to avoid higher export tax), which may lead to higher palm oil inventories," said a Malaysia-based analyst.
In April, Indonesia will raise its tax on CPO exports to 4.5% from 3% now. This may prompt a surge in palm oil shipments to Malaysia as suppliers rush to ship as much oil to avoid the higher export tax.
"Any major movement in CPO prices hinges on tomorrow's stocks and acreage report from the US Department of Agriculture. While the report is tipped to be bullish, any recovery in CPO prices will be short-lived as export demand isn't rising fast enough while the strengthening ringgit will limit upside," said S. Paramalingam, executive director at brokerage firm Pelindung Bestari Sdn. Bhd.
Analysts have projected that the area will total 88.94 million acres in Wednesday's planting intentions report from the USDA.
While the estimates are a tad up from last year's total of 86.5 million acres, the figure is slightly lower than US government's earlier forecast of 89 million acres.
In the cash market, palm olein July/August/September was traded at $795/ton, said an executive at Singapore-based commodities brokerage.
Cash CPO for prompt delivery was offered MYR10 higher at MYR2,600/ton.
Open interest on the BMD was 78,081 lots, down from 79,450 lots Monday. One lot is equivalent to 25 tons.
A total of 19,558 lots of CPO were traded versus 15,643 lots Friday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low Apr 2010 2,591 2,589 Up 02 2,591 2,535 May 2010 2,563 2,553 Up 10 2,570 2,527 Jun 2010 2,545 2,520 Up 25 2,548 2,501 Jul 2010 2,515 2,510 Up 05 2,526 2,486-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;