Crude Palm Oil Ends Up 1.2%; Likely Higher July 1-15 Exports

Crude palm oil futures on Malaysia’s derivatives exchange rose for a fifth trading session Wednesday, as expectations of higher exports during the July 1-15 period prompted covering of short positions, trade participants said.

The benchmark September contract on the Bursa Malaysia Derivatives exchange ended MYR28 higher or 1.2% higher at MYR2,381, after rising to a two-week high of MYR2,384/ton in intraday trade.

Exports for the first 15 days of July probably rose 10%-11% on month to around 668,000 tons, a Singapore-based trading executive said.

Cargo surveyor Intertek Agri Services estimated exports in the first 15 days of last month at 600,921 tons, while SGS (Malaysia) Bhd. put the figure at 608,324 tons. Both surveyors will issue July 1-15 palm oil export data on Thursday.

According to Malaysia-based growers, the recent heavy rainfall in several oil palm growing regions may boost future production prospects, but it has hurt palm oil extraction rates from fresh fruit bunches, so growth in production growth is likely to be slower.

The extraction rate of oil from palm fruit is typically in a range of 20%-25%. Growers and trade participants said that figure has declined to around 18%-18.6%.

The oil palm growing regions of Southeast Asia will likely see mostly wet weather for the rest of the week, according to Chicago-based meteorologist Mike Tannura.

Occasional rainfall and thunderstorms may bring around two inches of rain in key palm oil areas, Tannura said in a weekly report.

In the cash market, palm olein for October/November/December shipment was traded at $762.50/ton, free on board Malaysian ports, a Singapore-based trading executive said.

Cash CPO for prompt delivery was offered MYR30 higher at MYR2,460/ton.

CME Group Inc.’s dollar-based CPO futures contract wasn’t traded during Asian hours.

The rupiah-denominated October CPO futures on the Indonesia Commodity and Derivative Exchange was trading 1.7% higher at IDR6,410 a kilogram at 1045 GMT, with 183 lots changing hands. One lot equals 10 tons.

Open interest on the BMD was 72,521 lots, versus 72,201 lots Tuesday. One lot is equivalent to 25 tons.

A total of 10,680 lots of CPO were traded versus 12,376 lots Tuesday.

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

Month   Close  Previous  Change   High    Low
Jul'10  2,460     2,449  Up  11  2,460  2,451
Aug'10  2,423     2,395  Up  28  2,428  2,400
Sep'10  2,381     2,353  Up  28  2,384  2,357
Oct'10  2,363     2,335  Up  28  2,366  2,340 

-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com

(END) Dow Jones Newswires

July 14, 2010 06:59 ET (10:59 GMT)

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