Crude palm oil futures on Malaysia’s derivatives exchange ended higher in rangebound trade Friday, capped by ample inventories, trade participants said.The benchmark January contract on the Bursa Malaysia Derivatives ended MYR28 higher at MYR2,238 a metric ton, after rising to a seven-week high at MYR2,250 during afternoon session.
“Prices eased off on intraday profit-taking as there are ample stocks in October. That’s why the market isn’t moving much,” says Singapore-based trading executive.
Traders are expecting Malaysia’s end-October palm oil stocks to be higher than September’s end-stock level of 1.58 million tons, as there’s no indication of a pick-up in export demand.
Most traders are expecting export demand to fall further if the Oct. 1-25 period export data stays low, confirming the trend.
Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. will issue data on Malaysia’s palm oil exports on Monday.
Despite weak supply-demand fundamentals and Indonesia’s move to cut its base export price for CPO to $595/ton from $617/ton, BMD Crude Palm Oil (CPO) prices are holding above MYR2,200 levels as “funds are still holding on to their longs,” said a Kuala Lumpur-based trading executive.
If crude continues to trade around $81 a barrel or move higher, crude palm oil may move to MYR2,300 in the near term, the executive said.
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