Crude palm oil futures on Malaysia's
derivatives exchange edged up Friday, as optimism over a recovery in
export demand lent support.
The benchmark April contract on Bursa
Malaysia Derivatives ended 0.4% higher at 2,560 ringgits a metric ton
after moving in a choppy MYR2,532-MYR2,562 range.
Palm oil prices were mostly higher the
past few sessions due to optimism that export demand could go up for the
tropical oil used in a wide variety of consumer products ranging from
biscuits to chocolates and cooking oil.
The vegetable oil's wide price discount
to rival soyoil has encouraged "some substitution from expensive soy," a
broker in Singapore said.
Unfavorable weather in major soybean
growing regions of South America raised concerns about the soy crop and
lifted prices, widening its differential to palm oil. Palm oil is
currently offered $300-336/ton cheaper to soyoil, physical market data
showed.
Market participants will be looking
forward to January crop data by industry regulator, the Malaysian Palm
Oil Board, due Feb. 13. Stockpiles are tipped to ease a tad from
December's all-time high of 2.63 million tons, as export demand has
recovered.
Export estimates for the first 10 days of February by cargo surveyors are also scheduled to be released Feb. 13.
Inventories likely reached 2.60 million
tons, a modest 1.1% drop from a month earlier, while overall palm oil
output probably fell 15% to 1.51 million tons, in line with seasonally
lower yields and as heavy rain slowed harvesting activities.
Asian traders expect limited movements in
palm oil next week, as major palm oil consumer China will be closed the
whole week for Lunar New Year holidays.
In the cash market, refined palm olein
for February shipment was offered at $855/ton and cash CPO for prompt
shipment at MYR2440/ton.
Open interest on the BMD was 177,268 lots, versus 178,596 lots Thursday. One lot is equivalent to 25 tons.
A total of 18,142 lots of CPO were traded versus 30,443 lots Thursday.
Ending BMD CPO futures prices in MYR/ton:
Month Close Previous Change High Low
Feb'13 2,480 2,470 +10 2,468 2,468
Mar'13 2,534 2,524 +10 2,537 2,509
Apr'13 2,560 2,551 +9 2,562 2,532
May'13 2,579 2,568 +11 2,580 2,551
