DJ Asian Crude Palm Oil Ends Lows; Exports Likely Higher

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended off lows Wednesday due to short covering and fresh buying interest related to expectations that palm oil exports will rise in the first 10 days in June, trade participants said.

The benchmark August contract on the Bursa Malaysia Derivatives exchange ended down MYR14 at MYR2,418 a metric ton, after falling as much as 1.2% to MYR2,402, its lowest level since Jan. 27.

CPO couldn't sustain early gains due to weak supply fundamentals and soyoil's widening discount to palm olein. Crude soyoil free-on-board Argentinian ports was offered $30-$40/ton cheaper than palm olein FOB Malaysian ports, a Singapore-based cash market trading executive said, adding that most buyers now prefer the cheaper soyoil to cash palm olein. "Palm prices will have limited upside until palm olein is back at a discount to soyoil," a Singapore-base trading executive said.

Late last year, palm olein was being offered at a wide discount to soyoil of more than $100/ton, but soyoil prices have fallen due to a record soybean crop from South America, and palm prices have remained steady due to expectations palm oil output in Malaysia and Indonesia will rise only rise marginally in 2010. The increase in output this year is expected to be capped by the delayed effects of a recent El Nino climate episode, accompanies by reduced rainfall, which lowered oil palm yields.

Malaysia's palm oil exports during the June 1-10 period are likely to rise 16%-20% from the first 10 days of May to around 426,000 tons, traders said.

Cargo surveyor Intertek Agri Services estimated May 1-10 exports at 354,504 tons, while another surveyor, SGS (Malaysia) Bhd., put the figure at 366,050 tons. Both surveyors will issue June 1-10 palm oil export data on Thursday.

Despite likely higher exports, prices remained in the red Wednesday due to strength in the ringgit, palm olein's
premium over soyoil and uncertainty ahead of key industry data due Thursday from the government-linked Malaysian Palm Oil Board, an executive from a Kuala Lumpur-based brokerage said.

The dollar fell to MYR3.3140 from yesterday's close of MYR3.3260, making CPO a more expensive raw material for refiners. In the cash market, palm olein for July/August/September was traded at $762.50/ton, while October/November/December traded at $745/ton, $742.50/ton and $752.50/ton.

Meanwhile, CME's Group Inc.'s (CME) dollar-based CPO futures for September was trading $4.25 lower at $718/ton with 14 lots traded. One lot is equivalent to 25 tons.

August rupiah-denominated CPO futures on the Indonesia Commodity and Derivative Exchange ended 1.2% lower at IDR6,525 a kilogram with 149 lots traded. One lot is equivalent to 10 tons. The September contract ended 1.2% lower at IDR6,425/kg with 202 lots done.

Open interest on the BMD was 73,231 lots, versus 71,105 lots Tuesday. One lot is equivalent to 25 tons.
A total of 25,460 lots of CPO were traded versus 14,202 lots Tuesday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT:

Month    Close    Previous    Change      High        Low
Jun'10    2,525    2,536        Down 11   2,535      2,506
Jul'10     2,454    2,478        Down 24   2,481      2,442
Aug'10  2,418    2,432         Down 14   2,438      2,402
Sep'10  2,395    2,407         Down 12   2,413      2,377

-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
06-09-10 0657ET
Copyright (c) 2010 Dow Jones & Company, Inc.

DJ MARKET TALK: BMD CPO Down 1.1% Midday; Long Liquidation

[Dow Jones] BMD CPO futures down midday, but off lows after tumbling 1.2% to MYR2,402/ton, lowest since Jan. 27, on long liquidation; many traders liquidating positions ahead of likely bearish MPOB data due tomorrow, says Malaysia-based exporter. Weaker soyoil may increase selling pressure on CPO in afternoon session, says Singapore-based trading executive. Benchmark August contract MYR26 or 1.1% lower midday at MYR2,406/ton. July soyoil 12 points lower at 36.55 cents/pound on e-CBOT. (shie-lynn.lim@dowjones.com)

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06-09-10 0045ET
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DJ MARKET TALK: Higher Soyoil Positive For CPO Futures

[Dow Jones] Rise in soyoil may spur buying interest on CPO futures today, says Singapore-based trading executive, adds improving soyoil demand, higher crude oil support rise in prices. July soyoil finished 20 points higher on CBOT at 36.67 cents/pound overnight; last trading 1 point higher on e-CBOT. Palm prices generally move in tandem with soyoil as they compete for similar export destinations. (shie-lynn.lim@dowjones.com)

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06-08-10 2159ET
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DJ MARKET TALK: BMD CPO Futures May Open MYR10-MYR15 Higher

[Dow Jones] BMD CPO futures likely to open MYR10-MYR15 higher on short covering, technical buying, traders say. "CPO may stage technical rebound at opening after recent losses," says executive at Kuala Lumpur-based brokerage; adds CPO to trade sideways ahead of MPOB data on end-May stocks, output, exports due Thursday. Immediate resistance at MYR2,450, with support at MYR2,425/ton today, says analyst in Singapore; crude's rise in Asia supportive. Benchmark BMD August contract ended MYR17 lower at MYR2,432/ton yesterday. Nymex July crude trading 52 cents higher at $72.51/bbl on Globex.

(shie-lynn.lim@dowjones.com) Call us in Kuala Lumpur: +(603) 2026 1233

(END) Dow Jones Newswires

06-08-10 2153ET
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DJ Asian Crude Palm Oil Falls To 1-Week Low On Rising Supply, Ringgit

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange fell to their lowest levels in a week Tuesday, tumbling as much as 0.7% as the ringgit strengthened against the dollar, making palm oil a more expensive feedstock.

Market sentiment was also weighed down by rising CPO production, trade participants said. The benchmark August contract on the Bursa Malaysia Derivatives exchange ended down MYR17 at MYR2,432 a metric ton after hitting a one-week low at MYR2,431/ton. The dollar fell to MYR3.3230, from yesterday's close of MYR3.3330, making CPO more expensive for palm oil refiners.

A pullback in crude oil prices during Asian trade also weighed on prices. New York Mercantile Exchange light, sweet crude oil for July delivery was trading 46 cents lower at $70.98 a barrel at 1006 GMT. Trade participants said Malaysia's May palm oil output likely rose 5%-7% to around 1.37 million to 1.40 million tons, while end-May palm inventories were probably little changed at 1.62 million-1.63 million tons as exports didn't rise enough to offset the seasonal increase in production. The government-owned Malaysian Palm Oil Board is scheduled to issue Malaysia May palm oil output, stock and export data Thursday.
"The rise in production is likely to continue into June but (it) may be gradual as heavy rains may disrupt harvesting activities," said a senior executive of a Malaysia-based plantation company.

Rising production and inventories will likely continue to weigh on market sentiment, trade participants said.
"Prices may remain in a MYR2,400-MYR2,500/ton range in June," said a senior executive at a Kuala Lumpur-based commodities brokerage.

Meanwhile, CME's Group Inc.'s (CME) dollar-based CPO futures for September were trading 25 cents higher at $724.75/ton.

August rupiah-denominated CPO futures on the Indonesia Commodity and Derivative Exchange ended 0.9% lower at IDR6,605 a kilogram with 80 lots traded. One lot is equivalent to 10 tons. The September contract ended 1% lower at IDR6,500/kg with 148 lots done. In the cash market, palm olein for June was offered at $792.50/ton, while cash CPO for prompt shipment was offered unchanged at MYR2,500/ton.

Open interest on the BMD was at 71,105 lots, up from 69,345 lots Monday. One lot is equivalent to 25 tons.

A total of 14,202 lots of CPO were traded, compared with 14,255 lots Monday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT:

Month      Close Previous Change High Low
Jun'10      2,535 2,541 Down 06 2,545 2,535
Jul'10       2,478 2,496 Down 18 2,496 2,476
Aug'10     2,432 2,449 Down 17 2,456 2,431
Sep'10      2,407 2,419 Down 12 2,427 2,407

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

(END) Dow Jones Newswires
06-08-10 0636ET

Copyright (c) 2010 Dow Jones & Company, Inc.

[DJ]DJ MARKET TALK: BMD CPO Futures May Open MYR5-MYR15 Lower

[Dow Jones] BMD CPO futures expected to open MYR5-MYR15 lower on long liquidation, weakness in overnight crude, traders say. "CPO is likely to open lower, but may rebound later in the session on technical buying," says trading executive in Kuala Lumpur. CPO futures likely to move in MYR2,440-MYR2,460/ton range today, says analyst in Singapore. Nymex light, sweet crude for July settled 7 cents lower at $71.44/bbl, though last trading 20 cents higher on Globex. Benchmark BMD August CPO contract ended MYR25 lower at MYR2,449/ton yesterday.

(shie-lynn.lim@dowjones.com) Call us in Kuala Lumpur: +(603) 2026 1233
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06-07-10 2200ET
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FCPO August Contract May Ranging from 2440-2460

Hi traders,

Forecasting for CPO today may up and down between 2440-2460 range. The sentiment is still in the bearish mode.

Thanks

DJ Asian Crude Palm Oil Ends Lower On Crude Oil, Weak Fundamentals

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended lower Monday as crude oil extended its overnight losses, prompting investors to take profit.
Palm oil's fundamentals remain weak due to rising CPO production and its narrowing discount to soyoil, which makes the latter more attractive, trade participants said.

The benchmark August contract on Bursa Malaysia Derivatives ended MYR25 lower at MYR2,449 a metric ton, after tumbling to a one-week low of MYR2,437/ton in early trade.

Crude oil on the New York Mercantile Exchange dipped below $70 a barrel in Asia earlier in the day amid concerns over the euro zone's debt issues and poorer-than-expected job data from the U.S. July crude oil was trading 12 cents lower at $71.39/bbl at 1013 GMT. Trade participants said Malaysia's palm oil output last month likely rose 7% to 10% from April, and may continue to rise this month.
Palm oil prices may remain within their recent range for the next few sessions, moving in a MYR2,435-MYR2,460/ton band ahead of key production, export and stock data from the government-linked Malaysian Palm Oil Board due Thursday, they said.

Palm oil inventories are likely to increase in the second half of the year, as output in the world's second-largest
producer rises and major importers opt for soyoil due to a narrow spread to palm, affecting export growth, according to industry analyst James Fry. "There is no reason to doubt (that stocks will rise), especially since the Ramadan boost to exports ends relatively soon and China and India are favoring soyoil right now," Fry, who is chairman of London-based agribusiness consultancy LMC International Ltd., said. Export demand for CPO normally increases during the major Muslim festival.

CPO production in Malaysia this year is likely to rise from the 2009 level of 17.6 million tons, due to slow
replanting and growth in mature producing areas, he said. The expected rise in output and stocks could place downward pressure on CPO prices, which have declined 8.8% since the start of the year as palm oil's wide discount to soyoil disappeared, steering buyers to soyoil.

Cash palm olein used to be offered at a discount of more than $100/ton to soyoil, but the spread has narrowed since late last year and it now trades at par or at a slight premium. In the cash market, palm olein for July delivery traded at $782.50/ton and October/November/December contracts at $757.50/ton and $760/ton free on board Malaysian ports, a Singapore-based trading executive said.

Cash CPO for prompt shipment was offered MYR20 lower at MYR2,550/ton. Open interest on the BMD  as 69,345 lots versus 69,501 lots Friday. A total of 14,255 lots of CPO were traded compared with 10,117 lots Friday. One lot is equivalent to 25 tons.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
 
Month   Close  Previous  Change    High     Low 
Jun'10   2,538     2,560 Down 22   2,544   2,538 
Jul'10   2,496     2,515 Down 19   2,496   2,481 
Aug'10   2,449     2,474 Down 25   2,456   2,437 
Sep'10   2,419     2,448 Down 29   2,429,  2,410 
 
  -By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;
shie-lynn.lim@dowjones.com 
 

[DJ]DJ Pakistan CPO Imports May Rise Due To Import Duty Cut -Executive

KUALA LUMPUR (Dow Jones)--Pakistan, the third-largest buyer of palm oil after India and China, may step up purchases of crude palm oil after the government reduced the import duty on the commodity in a new federal budget, a senior executive said Monday. "Much of the rise in CPO imports will likely come from Indonesia," a Pakistan-based trading executive at Jaleel Brothers Ltd. said by phone. "Should Pakistan complete the free trade agreement with Indonesia, CPO purchases from Indonesia will be higher."

Pakistan reduced the import duty on CPO to PKR8,000 ($94) a metric ton from PKR9,000 in the budget released Saturday. The country sources around 95% of its palm oil from Malaysia and the remainder from Indonesia. In the last few years, Pakistan has bought more CPO from Indonesia due to a quota Malaysia imposes on CPO exports to encourage sales of higher-value refined palm products. Pakistan relies heavily on imports to supply its edible oil consumption of 3 million tons a year, as it produces only 800,000 tons of oil a year from sunflowers, rapeseeds and cottonseeds.

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

(END) Dow Jones Newswires

06-07-10 0613ET
Copyright (c) 2010 Dow Jones & Company, Inc.
E-

[DJ]DJ MARKET TALK: BMD CPO Futures Down Midday On Long Liquidation

[Dow Jones] BMD CPO futures lower midday on long liquidation, profit-taking, traders say. Market vulnerable to further declines later in the day amid bearish external cues with broad weakness in global markets due to fresh euro-zone worries and Friday's U.S. employment data, Singapore-based exporter says. But weaker ringgit against dollar may cap losses, Malaysia-based analyst says. Dollar strengthens to MYR3.3345 vs Friday's close MYR3.2700. Benchmark August contract trading at MYR2,450, down MYR24.

(shie-lynn.lim@dowjones.com) Call us in Kuala Lumpur: +603 2026 1233

(END) Dow Jones Newswires
06-07-10 0101ET
Copyright (c) 2010 Dow Jones & Company, Inc.

DJ Malaysia Palm Oil Stocks To Rise As Buyers Favor Soyoil -Fry

KUALA LUMPUR (Dow Jones)--Malaysia's palm oil inventory levels are likely to rise in the second half of the year as output in the second-largest palm oil producer in the world increases and major importers opt for soyoil due to a narrow spread to palm, affecting export growth, according to industry analyst James Fry.

"There is no reason to doubt (the rise in stocks) especially since the Ramadan boost to exports ends relatively soon and China and India are favoring soyoil right now," Fry, who is also chairman at London-based agribusiness consultancy firm LMC International Ltd., told Dow Jones Newswires via email
over the weekend.



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

DJ MARKET TALK: BMD CPO Futures May Open MYR10-MYR25 Lower

[Dow Jones]--BMD CPO futures expected to open MYR10-MYR25 lower amid broad-based selling pressure in regional stock markets, commodities, traders say. Crude oil's falling below $70/bbl in early Asian trade could push prices to MYR2,450/ton level on profit-taking, selling pressure, says broker in Malaysia; puts contract in MYR2,430-MYR2,465/ton range today. Benchmark August contract ended MYR18 higher Friday at MYR2,474/ton. July crude oil trading $1.60 lower at $69.91/bbl on Globex after falling 4.2% Friday.

(shie-lynn.lim@dowjones.com)


Call us in Kuala Lumpur: +(603) 2026 1233