Palm Futures Down on Lack of Fresh Leads

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives retreated at close yesterday to end lower on lack of fresh leads, dealers said.

The market, which rebounded slightly at mid-day, saw no follow-through amid expectation of a weak production report for September to be released later this week by the Malaysian Palm Oil Board.

Weak production, coupled with expectation of lower exports for first 10 days of October, will cause further pressure on local prices throughout the week, the dealers said.

The two cargo surveyors – Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS) – are expected to release the October 1-10 export data next week.

ECM Libra Investment Research in a research note yesterday said the month of September, coinciding with the Aidilfitri holidays, would have seen less harvesting.

“Our expectation is that there would not be any significant increase in stock levels,” the research firm said.

At close, the CPO futures for October 2009 fell RM30 to RM2,100 per tonne, November 2009 declined RM7 to RM2,055 per tonne, December 2009 dropped RM5 to RM2,042 per tonne and January 2010 went down RM3 to RM2,043 per tonne.

Volume increased to 12,331 lots from 9,451 lots last Friday and open interest rose to 94,984 contracts from 94,276 contracts previously.

On the physical market, October South dropped to RM2,110 per tonne from RM2,150 per tonne previously.

Source : Business Times

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