May 27, 2006	Saturday	Rabi-us-Sani 28, 1427

KUALA LUMPUR, May 26: Malaysian crude palm oil futures ended up on Friday, as dealers scrambled to cover short positions ahead of a holiday in the United States next week, traders said.

The benchmark third-month August contract on the Bursa Malaysia Derivatives ended the morning up five ringgit at 1,446 ringgit ($397) a ton.

June was up six ringgit at 1,426 ringgit.

Overall volume stood at 5,627 lots of 25 tons each.

This is people covering short positions, but does not necessarily reflect the correct physical situation or the fundamentals, said one dealer, noting that Monday will be the Memorial Day holiday in the United States.

Physical prices are coming down. There is no demand.

The CBOT soyaoil market ended mostly higher, with July up 0.01 cent per lb at 25.09 cents and deferreds down 0.05 to 0.10 cent.

In physicals, the May crude palm oil saw offers at 1,400 ringgit in the southern and central regions against bids of 1,390. Trades were seen at 1,390 in both regions.

The market is still looking for directions, said one physical trader. Production is expected to be up seven to eight per cent in May, and stocks will definitely be higher. So the market could ease back.—Reuters