Business Times

Friday, August 29, 2008

CPO FUTURES

MALAYSIAN crude palm oil futures ended down more than 1 per cent after a volatile trading day yesterday, with some players starting to unwind positions ahead of a long holiday weekend, dealers said.

The benchmark November crude palm oil contract on the Bursa Malaysia Derivatives Exchange fell RM32 to close at RM2,503 (US$739) a tonne. It hit a session low of RM2,452 and a high of RM2,558.

“In Malaysia, Monday is a holiday so everybody is book-squaring or making their positions even ahead of the three-day holiday,” said a dealer at a foreign brokerage firm.

Other traded months fell between RM1 to RM60, except March and July contracts, which rose RM15 and RM24 ringgit, respectively.

Overall volume stood at 15,924 lots of 25 tonnes each.

Oil rose towards US$120 a barrel yesterday, its fourth day of gains, supported by the threat of damage to US oil installations from tropical storm Gustav.

US crude futures for October delivery were up 76 cents to US$118.91 a barrel by 1000 GMT.

Palm oil futures have been hurt this week by rising supply and falling soyoil prices.

Industry analyst Dorab Mistry told a conference earlier this week that benchmark crude palm oil futures were likely to fall to RM2,200 per tonne due to increasing supplies.

Malaysian crude palm oil output forecasts of 17.4 million tonnes for 2008 could be comfortably exceeded, while Indonesia’s output will rise beyond 19 million tonnes, he said.

September soybean oil futures, which usually signal the trend in palm oil futures, were down 1.44 per cent at 53.44 US cents per lb at 1100 GMT yesterday.

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