KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended lower Tuesday, with investors liquidating positions following disappointing export estimates.
A brief pullback in crude oil prices, which traded on both sides in Asia, also weighed on palm oil, trade participants said.
Listless, sideways trade is likely Wednesday as markets in Hong Kong, Taiwan and China are closed for a public holiday, and bearish fundamentals are likely to keep prices subdued for the next few weeks.
The benchmark August contract on the Bursa Malaysia Derivatives ended MYR19 lower at MYR2,391 a metric ton, after falling as much as 1.3% to MYR2,378/ton, its lowest level in seven months.
Cargo surveyor Intertek Agri Services estimated palm exports for the June 1-15 period at 600,921 tons, up only 1.5% from a month earlier, while a second surveyor, SGS (Malaysia) Bhd., put the figure at 608,324 tons, down 2%.
"The numbers are a disappointment. With palm inventory levels rising in Indonesia and Malaysia, and large edible oil stocks at ports in China and India, prices are likely to trade lower for the rest of the month," a senior executive at a Malaysia-based trading company said.
A grower at an major plantation company in Indonesia said the country's palm inventories at the end of this month will likely rise to around 1.75 million tons from about 1.65 million-1.70 million tons at the end of last month.
Indonesia doesn't issue official monthly data on palm oil production and stocks.
Stocks in Malaysia will likely increase slightly from 1.56 million tons at the end of last month, an analyst in Kuala Lumpur said.
In the cash market, palm olein for July traded at $780/ton, free-on-board Malaysian ports, while January/February/March olein changed hands at $747.50/ton, a Singapore-based broker said.
Cash CPO for prompt delivery was offered steady at MYR2,530/ton.
CME Group's dollar-based CPO futures for September were offered $1.25 lower at $730.00/ton around 1023 GMT, with no lots traded.
Rupiah-denominated August CPO futures on the Indonesia Commodity and Derivative Exchange ended 0.5% lower at IDR6,485 a kilogram, with six lots traded. One lot is equivalent to 10 tons.
The September contract was trading 0.4% lower at IDR6,430/kg, with 12 lots done.
Open interest on the BMD was 77,731 lots, compared with 78,541 lots Monday. One lot is equal to 25 tons.
A total of 15,455 lots of CPO were traded on BMD versus 11,128 lots Monday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Jun'10 2,548 2,549 Down 1 2,549 2,548
Jul'10 2,439 2,455 Down 16 2,462 2,430
Aug'10 2,391 2,410 Down 19 2,415 2,378
Sep'10 2,366 2,384 Down 18 2,387 2,352
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; firstname.lastname@example.org
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