Crude palm oil futures slightly higher

Malaysian crude palm oil futures closed slightly firmer yesterday, giving up most of the day’s gains, as the market consolidated after last week’s supply tightness-inspired rally, traders said.

“The market is trying to consolidate waiting for more fresh bullish news to push it up further,” a trader at a Kaula Lumpur-based brokerage said.

The benchmark July contract on the Bursa Malaysia Derivatives Exchange rose RM11, or 0.45 per cent, to RM2,446, after going as high as RM2,501 ringgit and as low as RM2,393.
The midday rally was boosted by news of stronger exports during the first 20 days of April but could not sustain as the price was seen overbought, traders said.

“I think the rally is overdone. Today we see the market tested RM2,500 again but of course could not sustain the momentum, so that tiggered some technical selling,” the trader said.

The price of the tropical oil - used in various products from soap to biodiesel - has gained 47 per cent this year supported by falling Malaysian palm stock.

Analysts said top producers Indonesia and Malaysia could see palm output falling in April-June, rather than a gradual increase as usually expected, driving total stocks down by more than half to below 2.5 million tonnes by the end of the period, from a record 5 million tonnes in November.

Exports of Malaysian palm oil products for April 1-20 rose 4.2 per cent to 754,129 tonnes, from 723,770 tonnes shipped between March 1-20, cargo surveyor Intertek Testing Services said yesterday.

Another cargo surveyor Societe Generale de Surveillance said yesterday exports of Malaysian palm oil products for April 1-20 rose 0.8 per cent to 747,575 tonnes from 741,397 tonnes shipped between March 1 and 20.

Other traded months rose between RM5 and RM41.

Overall volume was heavy at 18,303 lots of 25 tonnes each, nearly doubled the usual 10,000 lots.

In the Malaysian physical market, trades for April and May were done between RM2,610 and RM2,630 in the southern region, and at RM2,600-RM2,630 in the central region.