Tuesday, June 29, 2010

DJ Asia Crude Palm Oil Ends Down On Crude, Soyoil, Export Expectations

JAKARTA (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday, dragged down by weak crude oil and soyoil futures.

Expectations that June's exports may not be strong enough to offset higher production also weighed on price sentiment.

The benchmark September contract on the Bursa Malaysia Derivatives ended 1.4% lower at MYR2,366 a metric ton, after trading between MYR2,362 and MYR2,390.

By the end of trade on the BMD, July soyoil at the Chicago Board of Trade was down 31 points at 36.63 cents a pound in electronic trading. Brent crude oil for August delivery on London's ICE Futures was down $1.47 at $76.12 a barrel.

Meanwhile, market participants speculated that cargo surveyors Intertek Agri Services and SGS (Malaysian) Bhd. will put June's exports at 1.36 million tons when they release their estimates for the month Wednesday, compared with 1.32 million-1.33 million tons for May.

A Singapore-based palm oil analyst has estimated palm oil production in June around 10%-15% higher on month, so if the cargo surveyors' estimates match market expectations, inventories will likely rise, which is bearish for prices.

The cash market was quiet, with many participants on the sidelines, awaiting a clearer picture on June palm oil export volumes to emerge before making any major moves.

Cash palm olein for August was traded at $780/ton, free on board Malaysian ports.

Open interest on the BMD was 74,972 lots versus 75,805 lots Monday. One lot is equivalent to 25 tons.

A total of 15,008 lots of CPO were traded versus 8,026 lots Monday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
Month   Close  Previous  Change   High    Low 
Jul'10  2,435     2,464  Down 29  2,450   2,432 
Aug'10  2,391     2,423  Down 32  2,416   2,389 
Sep'10  2,366     2,400  Down 34  2,390   2,362 
Oct'10  2,350     2,384  Down 34  2,377   2,350 
  -By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;

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