DJ Asian Crude Palm Oil Ends Up; July 1-10 Exports Likely Higher

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended higher Friday as crude oil prices rallied in Asian hours and bullish expectations for export demand during the July 1-10 period cheered investors.

The benchmark September contract on the Bursa Malaysia Derivatives ended MYR11 higher at MYR2,300 a metric ton, after moving in a MYR2,293/ton-MYR2,320/ton range.

Trade participants anticipate palm oil export data by cargo surveyor Intertek Agri Services due Saturday will point to rising demand as a major Islamic festive season looms.

A shipping executive in Penang said Malaysia's palm oil shipments in the first 10 days of July likely rose 6.8% from the same period a month earlier, to around 465,000 tons. Another surveyor, SGS (Malaysia) Bhd., is due to release its export estimate Monday.

Intertek and SGS pegged June 1-10 palm oil shipments at 435,148 tons and 423,199 tons, respectively.

Strong demand in the physical market lent support to the rise in futures prices, cash-market brokers said.

"Buyers have made brisk purchases to cover their requirements when prices fell to their lowest level on Wednesday," a senior trading executive at a Kuala Lumpur-based brokerage said.

A strong vessel lineup at Malaysian ports indicates exports will likely be higher for the first half of this month, he said.

"Major palm oil buyers such as India and Pakistan are back in the market," an executive at a global trading company said.

Some among trade participants liquidated positions ahead of a supply and demand crop report by the U.S. Department of Agriculture due later Friday that will confirm tight U.S. soybean crop and another, from the government-linked Malaysian Palm Oil Board due Monday.

In the cash market, trade was active with palm olein for August changing hands at $772.50/ton, free-on-board Malaysian ports, September at $757.50/ton and $760/ton and October/November/December at $747.50/ton.

Cash CPO for prompt delivery was offered MRY20 higher at MYR2,430/ton.

CME Group Inc.'s dollar-based September CPO futures contract for September was up $3.50 from its U.S. close at $721.25/ton, with one 25-ton lot traded.

Rupiah-denominated September CPO futures on the Indonesia Commodity and Derivative Exchange were 1% higher at IDR6,300 a kilogram at 1023 GMT, with 141 lots done.

The October contract was trading 1% higher at IDR62,600/kg with 217 lots changing hands. One lot is equivalent to 10 tons.

Open interest on the BMD was 72,569 lots, versus 74,093 lots Thursday. One lot is equivalent to 25 tons.

A total of 16,138 lots of CPO were traded versus 14,674 lots Thursday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
 
Month   Close  Previous  Change   High    Low 
Jul'10  2,429     2,420  Up  09   2,440   2,425 
Aug'10  2,344     2,330  Up  14   2,366   2,338 
Sep'10  2,300     2,289  Up  11   2,320   2,293 
Oct'10  2,287     2,275  Up  12   2,302   2,279 
 
 
  -By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;
shie-lynn.lim@dowjones.com