Sony_Boy
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Asian Crude Palm Oil Ends Up At 7-Month High As Crude Rallies (05 Jan 2009)
Crude palm oil futures on Malaysia's derivatives exchange rose for the fourth successive trading day to the highest level in more than seven months as crude oil prices neared $82 a barrel. Trade participants said positive leads from both soyoil and crude oil prices in after-hours trade helped the rally but cautioned prices may decline on profit-taking amid fears end-December palm oil reserves may be higher while export demand in January may be little changed from last month.
The benchmark March contract on the Bursa Malaysia Derivatives ended MYR2 higher at MYR2,682 a metric ton after rising 0.86% to an intraday high of MYR2,703/ton, for the first time since May 15.
But prices weren't able to sustain above the crucial psychological MYR2,700 level and some investors liquidated positions to take profit, said a Kuala Lumpur-based broker. "There is a growing concern that December stocks are going to be higher due to increased palm oil imports from Indonesia amid waning export demand," said an analyst from Kuala Lumpur-based Kenanga Deutsche Futures.
"Export performance isn't going to be strong in January. Festive celebrations like the Chinese New Year (in February) usually spur export demand, but most Chinese buyers already bought their requirements in the last two months of 2009," said a Malaysia-based vegetable oils exporter. Shipping brokers and trading executives expect export demand in the first 10 days of January to remain unchanged or slightly lower on month. Cargo surveyors put palm oil sales during the Dec. 1-10 period at 399,575-412,166 tons.
Trade participants are also concerned rising CPO prices may continue to curb palm-based biodiesel production even though crude oil is trading near $82. Most producers said CPO prices need to decline to MYR2,200 levels, with crude oil around $80/bbl, to make it viable to produce palm-based biodiesel. They said the sharp rise in CPO prices may continue to slow down growth in the biodiesel industry.
At 1017 GMT, light, sweet crude for February delivery on the New York Mercantile Exchange was trading 23 cents higher at $81.74/bbl. January soyoil on the Chicago Board of Trade was trading 10 points higher at 41.39 cents a pound in electronic trading by the end of trade on the BMD.
In the cash market, palm olein for April/May/June traded at $835/ton, $840/ton and $842.50/ton, free on board Malaysian ports, a Singapore-based trader said. Cash CPO for prompt delivery was offered MYR5 higher at MYR2,635/ton. Open interest on the BMD was 75,181 lots, down from 76,366 lots traded Monday. One lot is equivalent to 25 tons. A total of 12,031 lots of CPO were traded versus 7,587 lots traded Thursday.
Crude palm oil futures on Malaysia's derivatives exchange rose for the fourth successive trading day to the highest level in more than seven months as crude oil prices neared $82 a barrel. Trade participants said positive leads from both soyoil and crude oil prices in after-hours trade helped the rally but cautioned prices may decline on profit-taking amid fears end-December palm oil reserves may be higher while export demand in January may be little changed from last month.
The benchmark March contract on the Bursa Malaysia Derivatives ended MYR2 higher at MYR2,682 a metric ton after rising 0.86% to an intraday high of MYR2,703/ton, for the first time since May 15.
But prices weren't able to sustain above the crucial psychological MYR2,700 level and some investors liquidated positions to take profit, said a Kuala Lumpur-based broker. "There is a growing concern that December stocks are going to be higher due to increased palm oil imports from Indonesia amid waning export demand," said an analyst from Kuala Lumpur-based Kenanga Deutsche Futures.
"Export performance isn't going to be strong in January. Festive celebrations like the Chinese New Year (in February) usually spur export demand, but most Chinese buyers already bought their requirements in the last two months of 2009," said a Malaysia-based vegetable oils exporter. Shipping brokers and trading executives expect export demand in the first 10 days of January to remain unchanged or slightly lower on month. Cargo surveyors put palm oil sales during the Dec. 1-10 period at 399,575-412,166 tons.
Trade participants are also concerned rising CPO prices may continue to curb palm-based biodiesel production even though crude oil is trading near $82. Most producers said CPO prices need to decline to MYR2,200 levels, with crude oil around $80/bbl, to make it viable to produce palm-based biodiesel. They said the sharp rise in CPO prices may continue to slow down growth in the biodiesel industry.
At 1017 GMT, light, sweet crude for February delivery on the New York Mercantile Exchange was trading 23 cents higher at $81.74/bbl. January soyoil on the Chicago Board of Trade was trading 10 points higher at 41.39 cents a pound in electronic trading by the end of trade on the BMD.
In the cash market, palm olein for April/May/June traded at $835/ton, $840/ton and $842.50/ton, free on board Malaysian ports, a Singapore-based trader said. Cash CPO for prompt delivery was offered MYR5 higher at MYR2,635/ton. Open interest on the BMD was 75,181 lots, down from 76,366 lots traded Monday. One lot is equivalent to 25 tons. A total of 12,031 lots of CPO were traded versus 7,587 lots traded Thursday.
