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June 03, 2008
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Tuesday
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Jamadi-ul-Awwal 28, 1429
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Palm oil futures edge up
KUALA LUMPUR, June 2: Malaysian crude palm oil futures rose inched higher on Monday as investors hesitated between betting on the overnight strength in US soyaoil markets and selling on slower export demand.
Palm oil, which fell 3.5 per cent last week on weaker crude oil prices, was expected to rebound strongly on Monday but weak export data from cargo surveyors limited gains and rekindled worries that food and biodiesel demand may suffer.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange ended up 11 ringgit at 3,509 ringgit ($1,090), struggling to recover from Friday’s close of 3,498 ringgit.
The market has no impetus to move sharply higher. Unless monthly exports reach 1.4 million ton levels, this market is staying put.” The move in other traded months ranged between a rise of 28 ringgit and 140 ringgit declines. Overall volumes fell to 7,393 lots of 25 tons each from the usual 10,000 lot levels.
Exports of Malaysian palm oil products for May fell 6 per cent to 1,209,475 tons from 1,286,454 tons shipped in April, cargo surveyor Intertek Testing Services said on Saturday.
Another cargo surveyor, Societe Generale de Surveillance said palm exports in May fell 3.8 per cent to 1,264,757 tons.
The last time palm oil exports surged to 1.4 million tons was in December last year as countries across Asia scrambled to stock up for festivities, data from Intertek showed.
China has been quiet for the past two months, I suspect that it has already beefed up its reserves and can afford to wait out a good technical correction in prices, said another trader with a local brokerage.
Oil fell more than $1 to near $126 on Monday as the US dollar firmed and as the market shrugged off Tropical Storm Arthur, which marked the start of the Atlantic hurricane season by shutting two Mexican oil ports.
In Malaysia’s cash market, crude palm oil for June shipment in the southern region was quoted at 3,540/3,560 ringgit. Trades were done at 3,530 and 3,550 ringgit.—Reuters
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