Palmoil HQ Crude Palm Oil Futures End Flat; Output May Outstrip Exports

Crude palm oil futures on Malaysia's derivatives exchange ended flat Monday in volatile trade, with the market staying in the red for most of the day due to fears output may outstrip exports, but higher exports in October versus September helped cap losses, said trade participants.

The benchmark January contract on the Bursa Malaysia Derivatives ended flat at MYR2,208 a metric ton after moving in a MYR2,154-MYR2,177/ton range.

Malaysia's October palm oil exports rose 16% from September to 1.42 million tons, according to estimates by cargo surveyor Intertek Agri Services.

Intertek had estimated exports at 1.23 million tons in September.

Similarly, cargo surveyor SGS (Malaysia) Bhd. revealed higher estimates for exports in October.

October exports were estimated at 1.43 million tons, up from 1.27 million tons in September.

Both sets of estimates fell within market expectations of 1.33-1.42 million tons.

"(The estimates) didn't exceed expectations, which was needed as participants fear output may outstrip demand," said a Kuala Lumpur-based trader.

October output is expected to rise 20% from September and end-month stocks may reach 1.8 million tons, up from 1.58 million tons, said a Singapore-based trader.

Trade was also thin because many participants were away at a conference on sustainable palm oil.

"There just weren't any buyers today. Many prefer to broker deals only when all participants are back at work. Most buyers are well-stocked for November and December delivery and are not in a hurry to make purchases for future months," said the Singapore trader.

At the conference, members of the Roundtable on Sustainable Palm Oil, which include palm oil buyers and non-governmental organizations, decided for the time being against including mandatory greenhouse emission standards for its "green" palm oil certification process.

The RSPO had previously planned to announce emission standards at its annual conference –which precedes by a month a key international gathering to set global emissions targets in Copehagen — but decided against compulsory measures.

Cash palm olein for January/February/March was traded at $675/ton. Cash CPO for prompt shipment was offered MYR30 lower at MYR2,170/ton.

A total of 18,601 lots of CPO was traded on the BMD, versus 10,571 lots Friday.

The open interest stood at 94,956 lots Monday, down from 81,429 lots. One lot is equivalent to 25 tons.