CRUDE PALM OIL ENDS LITTLE CHANGED IN VOLATILE TRADE

Crude palm oil futures on Malaysia’s derivatives exchange ended little changed Thursday after moving both ways in volatile trade amid profit-taking and liquidation of positions ahead of the long weekend, trade participants said.

CPO futures opened up in the early session but gave up early gains, tumbling below MYR2,600 a metric ton despite assurances by the U.S. Federal Reserve chairman Ben Bernanke that interest rates may remain low for a while.

The benchmark May CPO contract on the Bursa Malaysia Derivatives ended MYR5 higher at MYR2,596 after moving in a MYR2,580-MYR2,615/ton range. The markets will be closed for a national holiday Friday.

A likely drawdown in palm inventories despite lower palm oil shipments prevented a significant fall in prices, as output is expected to be lower in February and March due to dry weather and the ongoing oil palm replanting program, traders and analysts said.

“Lower output and inventories may keep CPO futures steady at MYR2,550-MYR2,650/ton next week,” said a Kuala Lumpur-based trading executive.

Cargo surveyor Intertek Agri Services put Feb. 1-25 palm oil exports at 1.09 million tons, down 10% on month. Another surveyor, SGS (Malaysia) Bhd., estimated exports declined 8.9% to 1.10 million tons.

Cargo surveyors put palm oil shipments at 1.21 million tons for the same period in January.

In Indonesia, PT KPB Nusantara, a unit of PT Perkebunan Nusantara, said it sold 1,500 tons of CPO offered in a government auction Thursday.

But a further 500 tons remained unsold, as the bids were lower than its offer price of IDR7462 a kilogram.

In the cash market, palm olein for April/May/June traded at $795/ton, July/August/September traded at $795/ton, said a Singapore-based trading executive.

Cash CPO for prompt shipment was offered MYR5 lower at MYR2,605/ton.

Open interest on the BMD was 82,981 lots Thursday, down from 83,180 lots Wednesday. One lot is equivalent to 25 tons.

Some 17,856 lots of CPO were traded versus 11,714 lots Wednesday.

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

Month Close Previous Change High Low
Mar 2010 2,595 2,600 Down 05 2,619 2,590
Apr 2010 2,590 2,590 Unchanged 2,620 2,589
May 2010 2,595 2,590 Up 05 2,615 2,580
Jun 2010 2,579 2,580 Down 01 2,604 2,572

(END) Dow Jones Newswires

February 25, 2010 05:54 ET (10:54 GMT

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

Crude Palm Oil Ends Up On Higher-Than-Expected Exports

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Wednesday on the back of higher-than-expected exports and higher crude oil futures, said trade participants.

The benchmark May CPO contract on the Bursa Malaysia Derivatives ended MYR48 higher at MYR2,628 a metric ton, after trading in a MYR2,606-MYR2,628/ton range.

Cargo surveyor SGS (Malaysia) Bhd. estimated that Malaysia's palm oil exports in the Feb. 1-15 period fell 5.5% from a month earlier to 607,660 tons.

However, the estimates were higher than market expectations of around 570,000 tons.

Another cargo surveyor, Intertek Agri Services, Tuesday estimated the figure at 565,114 tons, a decrease of 16% on month.

"The market is expecting exports to fall from mid-February and through to March. But production is also expected to fall, probably by around 10%, so the impact of lower exports would be minimal especially if the fall is within expectations," said a Singapore-based trader.

Another Singapore-based trader said the SGS estimates were surprising as exports didn't fall as much as expected and supported CPO prices in a market lacking fresh local cues.

The lack of fresh local cues due to the closure of several Asian markets for the Lunar New Year holiday prompted sluggish, rangebound trade for most of the day.

"Trading activity might pick up only next week when Chinese buyers re-enter the market," said a Kuala Lumpur-based trader.

Higher crude oil futures during Asian trading hours also supported CPO prices. At the end of trade on the BMD, crude oil futures on the New York Mercantile Exchange were up $0.26 at $75.94 a barrel.

In the cash market, palm olein for April/May/June traded at $800/ton, said a Singapore-based trader.

Cash CPO for prompt shipment was offered MYR60 higher at MYR2,650/ton.

Open interest on the BMD was 79,210 lots last trade Friday, up from 78,551 lots. One lot is equivalent to 25 tons.

Some 14,161 lots of CPO were traded versus 8,789 lots Friday.