The crude palm oil is flying!
- Asia CPO Ends 6-Mo High On Strong Sales, Lower Output
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange rose as much as 5.1% to a fresh six-month high, crossing MYR2,150 a metric ton, as one global trading company locked in supplies for palm olein and trade participants estimated lower output for March.
The benchmark June contract on the Bursa Malaysia Derivatives ended MYR89 higher at MYR2,159/ton, after reaching an intraday high of MYR2,175, a level not seen since Sept. 29, 2008.
CPO daily volumes traded on the BMD were above 25,000 lots for the second consecutive day, while open interest held steady as investors liquidated long positions to book profits before going long again. One lot comprises 25 tons.
"Since yesterday, one of the major companies is buying palm olein in the physical market and this has pushed up hedging on the BMD," said a trader in Singapore.
He said the company has bought at least 15,000 tons of palm olein for July/August/September and also purchased crude palm oil for the same shipment period at $595/ton and $600/ton, cost, insurance and freight basis, Rotterdam.
He said once the palm olein and CPO purchases ease, prices may witness a downward correction.
"For the last 10 days, there was hardly any buying of palm olein as traders were anticipating a fall in prices. But after U.S. soybean plantings were forecast below expectations (for 2009), buyers rushed to cover their requirements and prices have surged," said a Kuala Lumpur-based executive at a global trading company.
While CPO output in March is typically higher than in February, inputs from plantation companies suggest that may not be the case this year. Traders and plantation companies officials put Malaysia's CPO output in March down 5%-10% on month.
Plantation company officials said some estates are even reporting up to 12% lower output in March on month.
"Our plantations have estimated to have had lower production by at least 8% (on month in March) because the number of fresh fruit bunches available has come down by around 35% compared with December and January," said an executive at one of Malaysia's largest palm oil producing companies.
The end-March inventory numbers may drop further, to possibly below 1.5 million tons, because production may not be high enough to meet consumption, said Alvin Tai, an analyst with Kuala Lumpur-based OSK Research.
Malaysia's end-February palm oil stocks were estimated at 1.56 million tons. Data for March is likely to be released by the Malaysian Palm Oil Board on April 10.
Open interest in CPO on the BMD fell to 88,652 lots from 88,926 lots Wednesday. The traded volume rose to 26,826 lots from 26,304 lots.
Malaysia's cash palm olein for July/August/September shipment traded at $640/ton, $645, $650, $657.50 and $660, said a trader in Singapore.
He said CPO for May shipment traded at $585/ton, free-on-board, Indonesian ports.
The daily chart.
The 15 mins chart shows the amazing day!
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Apr 09 2,272 2,166 Up 106 2,272 2,169
May 09 2,221 2,115 Up 106 2,230 2,108
Jun 09 2,159 2,070 Up 89 2,175 2,057
Jul 09 2,120 2,035 Up 85 2,128 2,024
No comments:
Post a Comment