DJ Asian Crude Palm Oil Ends Tad Down; Supply Outlook Weigh

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended a tad lower Friday, after tumbling as much as 0.8% to their lowest level in eight months amid concerns over the pace of the global economic recovery and a bearish outlook for supply over the next three months.

The benchmark September contract on the Bursa Malaysia Derivatives exchange ended MYR11 lower at MYR2,335 a metric ton, off its intraday low of MYR2,328/ton.

Prices have declined 2.7% this week and may fall further next week, as "there's a big possibility we'll see a double-digit rise in July production," a senior trading executive at a Kuala Lumpur-based brokerage said.

Forays by soyoil and crude oil futures into positive territory in Asian trading hours helped cap CPO's losses. But with the Chicago Board of Trade closed Monday for a public holiday, leaving CPO without cues from its main competitor, soyoil, some market participants squared off positions towards the end of trade.

More weakness is likely due to a seasonal increase in palm oil supply in the July-September period, Siegfried Falk, a Hamburg-based analyst and co-editor at Oil World, said.

Still, a sufficiently sharp fall in prices could bring palm olein back to a discount to rival soyoil, after trading at a premium since late last year, shifting buyers' attention away from palm.

"Palm oil may develop a small price discount in the coming weeks (and) regain market share," Falk told Dow Jones Newswires by email.

Palm oil products have lost ground this year as soyoil prices tumbled on the back of strong supply prospects from South American harvests. Palm olein was recently trading at a $20-a-ton premium to soyoil, compared with a discount of more than $100/ton in December.

In the cash market, palm olein for July was offered unchanged at $790/ton and cash CPO at MYR2,440/ton, also unchanged.

CME Group Inc.'s dollar-based CPO futures contract for September wasn't traded in Asia, while rupiah-denominated September CPO futures on the Indonesia Commodity and Derivative Exchange was trading 0.4% higher at IDR6,285 a kilogram at 0945 GMT, with 128 lots done.

The October contract was trading 0.6% higher at IDR6,285/kg with 145 lots changing hands. One lot is equivalent to 10 tons.

Open interest on the BMD was 72,093 lots, compared with 72,242 lots Thursday. One lot is equivalent to 25 tons.

A total of 8,941 lots of CPO were traded versus 13,225 lots Thursday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
 
Month   Close  Previous  Change   High    Low 
Jul'10  2,406     2,411  Down  5  2,410   2,400 
Aug'10  2,358     2,370  Down 12  2,367   2,353 
Sep'10  2,335     2,346  Down 11  2,346   2,328 
Oct'10  2,322     2,331  Down  9  2,333   2,315 
 
 
  By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;
shie-lynn.lim@dowjones.com 

Friday Trading Tip

Hi traders,

Today CPO open at 2365 and closed at 2346. It try to tests 2340 level which is lowest level at 2342. Tomorrow it may upside bias if open >2360-2364 and close >2365. Otherwise it may downside bias if open <2350-2345 and close <2342. Overall long term trend is downside bias towards 2300 level.

Just my 2cents....

Thanks

DJ Asian Crude Palm Oil Ends Down On Broad-Based Selling Pressure

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended off lows after tumbling as much as 1.3% Thursday amid broad-based selling pressure across most asset classes due to concerns over China's slowing economic growth and worries about a possible double dip in global economies, trade participants said.

The benchmark September contract on the Bursa Malaysia Derivatives exchange ended MYR27 lower at MYR2,346 a metric ton after moving in a MYR2,342-MYR2,370 range.

Palm prices, having declined 2.3% so far this week, have "dropped too far and are technically oversold and this means prices are due for an upward correction," said a senior executive from a Kuala Lumpur-based brokerage.

But many trade participants said any rise in prices is likely to be short-lived as June's production figures are expected to rise 15% on month, outpacing export demand and leading to a rise in end-June palm inventory
levels.

Nevertheless, overall 2010 CPO output in Malaysia will likely fall below a previous forecast as unusually wet weather caused by a La Nina weather development may damage crops and reduce yields, Plantation and Commodities Minister Bernard Dompok said.

Dompok said he is revising his forecast for Malaysian CPO output to 17.8 million tons this year from a previous prediction of 18.1 million tons due to concerns over the likelihood of unusually wet weather in the second half of the year. Malaysia produced 17.6 million tons of CPO last year.

Dompok didn't give a prediction for CPO prices, but slower production growth in Malaysia, the world's second-biggest palm oil producer, could provide a floor for the market, which has seen a 13% fall in prices since the start of the year. CPO futures have been pressured by a record soybean crop in South America which narrowed the price gap between the two vegetable oils, making soyoil a cheaper alternative in some cases.

CME Group Inc.'s dollar-based CPO futures contract for September wasn't traded in Asia, while rupiah-denominated August CPO futures on the Indonesia Commodity and Derivative Exchange ended 0.2% lower at IDR6,325 a kilogram with three lots traded. One lot is equivalent to 10 tons. The September contract
ended 0.9% lower at IDR6,250/kg with 149 lots done.

Open interest on the BMD was 72,242 lots versus 74,789 lots Wednesday. One lot is equivalent to 25 tons.

A total of 13,225 lots of CPO were traded versus 15,164 lots Wednesday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
 
Month   Close  Previous  Change   High    Low 
Jul'10  2,411     2,425  Down 14  2,427   2,411 
Aug'10  2,370     2,392  Down 22  2,398   2,368 
Sep'10  2,346     2,373  Down 27  2,370   2,342 
Oct'10  2,331     2,353  Down 22  2,355   2,327 
 
 
  -By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233;
shie-lynn.lim@dowjones.com 

DJ Malaysia 2010 CPO Output Forecast Cut To 17.8 Mln Tons -Minister

KUALA LUMPUR (Dow Jones)--Malaysia's crude palm oil output this year will likely be lower than previously expected, as unusually wet weather caused by the La Nina weather may damage crops, Plantation and Commodities Minister Bernard Dompok said Thursday.

Dompok told Dow Jones Newswires that he is revising his forecast for Malaysian CPO output to 17.8 million metric tons this year from a previous prediction of 18.1 million tons due to concerns over the expected wet weather.

Malaysia produced 17.6 million tons of CPO last year.



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

Thursday Trading Tip

Hi traders,

Today CPO open 2354 and slides down to 2338, the lowest of 2010 level. It then closed at 2373 due to bullish crude oil & soyoil during Asian trading hour. However CPO long term trend still downside bias and may test 2350 tomorrow if open < 2360-2364 and close < 2350. But CPO may upside bias tomorrow if open > 2364-2372 and close >2373.

Thanks

Just my 2cents   

DJ Asian Crude Palm Oil Ends Up On Soyoil; Weak Exports Cap Gains

JAKARTA (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended higher Wednesday in volatile trade as a strong recovery in soyoil futures during Asian trading hours offset bearish lower-than-expected exports, trade participants said.

The benchmark September contract on the Bursa Malaysia Derivatives exchange ended up MYR7 at MYR2,373 a metric ton, after trading in a range of MYR2,338-MYR2,375.

At the end of trade on the BMD, July soyoil on the electronic Chicago Board of Trade was up 31 points at 36.24 cents a pound.

CBOT soyoil futures had dropped to an eight-month low in overnight trade, but its recovery in Asian trade helped CPO prices to climb from early lows back into positive territory in the afternoon.

However, lower-than-expected exports failed to impress the market, so gains and volume were limited.

Cargo surveyor SGS (Malaysia) Bhd. estimated Malaysia's June exports up 1.2% from the previous month at 1.34 million tons. Another surveyor, Intertek Agri Services, estimated exports at 1.35 million tons, up 1.5%. Both estimates were slightly lower than market expectations of 1.36 million tons.

Traders said they expect June's production to rise 10%-15%, strongly outpacing growth in exports of only 1.2%-1.5%, so buying interest was tepid.

"There's nothing to jolt the market into action," a Kuala Lumpur-based trader said.

The cash market was quiet with few trades reported.

Cash palm olein for August was traded at $770/ton, free on board Malaysian ports.

Open interest on the BMD was 74,789 lots versus 74,972 lots Tuesday. One lot is equivalent to 25 tons.

A total of 15,164 lots of CPO were traded versus 15,008 lots Tuesday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
 
Month   Close  Previous  Change   High    Low 
Jul'10  2,425     2,435  Down 10  2,432   2,410 
Aug'10  2,392     2,391  Up   01  2,401   2,365 
Sep'10  2,373     2,366  Up   07  2,375   2,338 
Oct'10  2,353     2,350  Up   03  2,361   2,325 
 
 
  -By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;
fawziah.selamat@dowjones.com 
 

DJ MARKET TALK: BMD CPO Up A Tad On Soyoil; Exports Fail To Jolt

[Dow Jones] BMD CPO futures gain slightly, spurred by recovery in soyoil, traders say. Benchmark September CPO +MYR4 at MYR2,370/ton, off intraday low MYR2,338/ton; e-CBOT July soyoil +37 points at 36.30 cents/lb. Soyoil providing some support, but buying interest tepid as export estimates, while positive,
come in close to market expectations; "there's nothing to jolt the market into action," says Kuala Lumpur-based trader. SGS (Malaysia) Bhd. estimates Malaysia June palm oil shipments +1.2% on month at 1.34 million tons, lower than Intertek's estimate of 1.35 million tons; market expected 1.36 million tons.(fawziah.selamat@dowjones.com)

Wednesday Trading Tips

Hi traders,

Today CPO try to tests 2360 level on evening session with higher volume. It is expected CPO to further downside if open < 2370-2375 and close < 2370. However it may uptrend if open >2380-2388 and close >2390. Overall trend is still downside bias.

Just my 2cents

Thanks

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;
fawziah.selamat@dowjones.com 

Tuesday Trading Tip

Hi Traders,

Tomorrow CPO may up if open >2395-2400 and close >2410. The trend will upside bias if overnight NYMEX Crude Oil above 78 and Soyoil CBOT above 37.70. However the CPO may down if open <2380-2388 and close <2380. Overall CPO trend still on downside bias towards 2370.

Just my 2cents

Happy trading

DJ Asia Crude Palm Oil Ends Up On Soyoil;Trade Thin On Lack Of Fresh Cues

JAKARTA (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday, tracking stronger soyoil futures in after-hours trade, trade participants said.

However, trading activity was thin as many participants sat on the sidelines, preferring to wait for a clearer picture on exports to emerge before making major moves.

Cargo surveyors are expected to release data on Malaysia's June 1-30 exports Wednesday.

The benchmark September contract on the Bursa Malaysia Derivatives exchange ended MYR16 higher at MYR2,400 a metric ton after trading in a narrow range of MYR2,388-MYR2,410.

A lack of fresh local cues prompted the market to rely heavily on soyoil movements.

By the end of trade on the BMD, July soyoil on the electronic Chicago Board of Trade was up 14 points at 37.30 cents a pound.

"Stronger soyoil futures helped prevent CPO prices from veering into negative territory, but they weren't enough to boost CPO prices substantially or encourage more trading activity on the BMD," said a Kuala Lumpur-based trader.

Participants said export data for June so far have shown volumes that were largely within expectations.

However, production is tipped to be on the rise, prompting slightly bearish sentiment despite stronger external cues today.

Oil palm production is expected to rise 5%-10% this month as the seasonal high-production cycle kicks into gear in June.

"The wild card is in determining whether June's exports will be much higher on month to negate the effects of higher production," said another Kuala Lumpur-based trader.

"If exports can show an increase of 5%-10%, then the market will likely hold above the psychological support level of MYR2,400," he added.

Cash palm olein for August was traded at $782.50/ton, free on board Malaysian ports.

Open interest on the BMD was 75,805 lots versus 76,131 lots Friday. One lot is equivalent to 25 tons.

A total of 8,026 lots of CPO were traded versus 9,069 lots Friday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
 
Month   Close  Previous  Change   High    Low 
Jul'10  2,464     2,451  Up   13  2,475   2,463 
Aug'10  2,423     2,409  Up   14  2,433   2,418 
Sep'10  2,400     2,384  Up   16  2,410   2,388 
Oct'10  2,384     2,373  Up   11  2,385   2,377 
 
 
  -By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277;
fawziah.selamat@dowjones.com 

Monday Trading Tip

Hi traders,

Last Friday was a very silent trading of the month. Not much volume traded. But expected reversal may develop (technical charting) next week if  CPO open >2388-2390 and close > 2395. If not the trend may further downside if open<2380-2384 and close <2375.

Just my 2cents.....

Happy trading