Palmoil HQ Crude Palm Oil Futures End Up On Bullish Price Forecast, Exports

Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday as a rise in crude oil in late trade and a likely increase in exports lifted market sentiment, trade participants said.

The benchmark January contract on the Bursa Malaysia Derivatives ended MYR20 higher at MYR2,266 a metric ton after trading in a MYR2,215-MYR2,270/ton range.

"Crude's rise by more than $1 gave support to (CPO) prices. CPO's rise toward the end of trade was also helped by a fairly bullish price forecast by James Fry," said a senior executive from a Kuala Lumpur-based commodities brokerage. "Over the past two days, most analysts are turning bullish again and this will give some support for prices for the time being."

Industry analyst James Fry said CPO prices may rise to MYR2,625/ton by April next year if Brent crude oil prices hold steady at $75 a barrel.

"If Brent crude drops (to $65), CPO prices may ease to MYR2,350/ton," he said at an industry conference on vegetable oils.

As China and India, both major buyers of vegetable oils, return to the market to restock supplies, CPO prices may rise to MYR2,400 in the first quarter next year, Dorab Mistry, director of Godrej International Ltd said at an industry conference on Sunday.

Price gains will also hinge on the development of the El-Nino weather phenomenon, he said.

Meanwhile, palm oil exports during the Nov. 1-10 period are likely to have risen 14%-16% on month to around 394,000 tons, trade participants said.

Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd likely to issue estimates of Nov. 1-10 exports on Tuesday.

At 1055 GMT, New York Mercantile Exchange light, sweet crude for December delivery was trading $1.22 higher at $78.65 a barrel.

Cash palm olein for January/February/March was offered at $695/ton.

Cash CPO for prompt shipment was offered unchanged at MYR2,180/ton.

A total of 9,955 lots of CPO were traded on the BMD, versus 9,871 lots Friday.

Open interest stood at 94,014 lots Monday, up from 93,667 lots. One lot is equivalent to 25 tons.

Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1032 GMT:

Month Close Previous Change High Low
Nov 09 2,200 2,169 Up 31 2,178 2,160
Dec 09 2,250 2,215 Up 35 2,250 2,185
Jan 10 2,266 2,246 Up 20 2,270 2,215
Feb 10 2,285 2,268 Up 17 2,289 2,235

-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com

(END) Dow Jones Newswires