Palm Futures Firmer on Short Covering

Crude  palm oil (CPO) futures prices on Bursa Malaysia Derivatives ended firmer yesterday on short-covering ahead of the release of key data next week, dealers said.

A dealer said the market was expected to face pressure next week on weak exports.

The Malaysian Palm Oil Board is expected to release the September production data next Monday and cargo surveyors later.

“Sentiment was also boosted by an overnight rise in rival soyabean prices but upside is seen limited due to lingering caution ahead of the industry data, which may show weaker exports and higher production,” traders said.

“Some people may think Thursday’s fall was a little bit too much. My bet is the market just bounced back because Chicago was up last night but later on it will go minus,” said a trader.

At the close, October 2009 and November each rose RM60 to RM2,129 and RM2,100 per tonne respectively, December increased RM55 to RM2,085 and January 2010 gained RM50 to RM2,082.

Turnover declined to 13,723 lots from 15,066 on Thursday.

Open interest, however, surged to 93,504 contracts from 91,556 contracts previously. On the physical market, current month October South went up RM30 to RM2,130 per tonne.

A Reuters poll showed on Thursday that Malaysian palm oil stocks rose 7.4 per cent to a seven-month high in September, as production accelerated, while exports dropped after big buyers reined in purchases.

Reserves in the world’s second largest palm oil producer have been rising since May and will likely hit 1.52 million tonnes in September, the highest since February, poll respondents said. Palm stocks correlate inversely with palm oil prices. Source :  Business Times

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