Crude palm oil futures on Malaysia's derivatives exchange ended higher Monday as investors covered short positions due to expectations that firm export demand the rest of the month could help reduce end-month inventory levels.
The benchmark January contract at Bursa Malaysia Derivatives ended 3% higher at 2,577 ringgit a metric ton after moving in a range of MYR2,497-MYR2,580/ton.
Strong Oct. 1-20 exports prompted some market participants to lower their stock projections for end-October to 2.5 million tons, down from previous estimates of 2.70-2.80 million tons, a Singapore-based trading executive said.
Cargo surveyor Intertek Agri Services last week said palm oil exports during the Oct. 1-20 period rose 14% from the same period the previous month to 1.06 million tons. Another surveyor, SGS (Malaysia) Bhd., Monday put exports for the period at 1.05 million tons, an increase of 17%.
End-October stockpiles of 2.5 million tons would represent a modest 0.8% rise from the previous month, compared with a 17% jump to 2.48 million tons as of end-September.
"Some speculative investors have initiated fresh long positions in BMD CPO after a sharp selldown earlier this month, which helped to prop up the market today," a dealer at a Kuala Lumpur-based investment bank said.
Open interest on the BMD was 151,660 lots, versus 148,945 lots Friday. One lot is equivalent to 25 tons.
A total of 37,259 lots of CPO were traded versus 27,875 lots Friday.
Ending BMD CPO futures prices in MYR/ton: Month Close Previous Change High Low Nov'12 2,469 2,404 +65 2,469 2,395 Dec'12 2,528 2,475 +53 2,544 2,460 Jan'13 2,577 2,501 +76 2,580 2,497 Feb'13 2,597 2,540 +57 2,610 2,530