Asian Crude Palm Oil Ends Down On Profit Taking; Trade Thin

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended slightly lower Friday, with prices giving up most of their gains on intraday long liquidation, said trade participants.

The benchmark January contract on the Bursa Malaysia Derivatives ended MYR1 lower at MYR2,246 a metric ton after trading in a narrow MYR2,230-MYR2,275/ton range throughout the day.

"Market volume has been fairly thin today, so some investors took the opportunity to do some selling, liquidating positions, which pushed prices lower," said an executive from a global trading company.

Profit taking by day traders erased gains made during the morning session, leading to some volatility in the last half hour of trade.

But a rebound in crude and soyoil prices supported palm oil prices.

"Prices shouldn't trade below MYR2,230 today" as soyoil and crude oil are positive for prices, a Kuala Lumpur-based analyst had said earlier in the day.

At 1017 GMT, light, sweet crude for December delivery was trading 50 cents higher at $80.12 a barrel.

December soyoil on the Chicago Board of Trade was trading 11 points higher at 37.29 cents a pound by the end of trade on the BMD.

Trade participants said many investors have also squared off positions ahead of key data releases by the US Department of Agriculture and October palm oil output and stock data by the Malaysian Palm Oil Board.

Producers and traders said October palm oil output had likely risen 17%-20% on month to 1.77 million to 1.87 million tons.

While exports in October likely rose 13%-16% to 1.42 million to 1.43 million tons, market sentiment remained cautious due to an expected rise in inventories, trade participants said.

Stock levels probably increased to between 1.75 million and 1.80 million tons as of end-October, they said

Cash palm olein for January/February/March was traded at $697.50/ton and $700/ton and April/May/June at $710/ton.

Cash CPO for prompt shipment was offered unchanged at MYR2,180/ton.

A total of 9,871 lots of CPO were traded on the BMD versus 12,263 lots Thursday.

Open interest stood at 93,667 lots Friday, down from 94,529 lots. One lot is equivalent to 25 tons.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT:

Month Close Previous Change High Low
Nov 09 2,160 2,175 Dn 15 2,180 2,160
Dec 09 2,215 2,221 Dn 06 2,242 2,210
Jan 10 2,246 2,247 Dn 01 2,275 2,230
Feb 10 2,266 2,266 Unch 2,298 2,253

-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com

(END) Dow Jones Newswires
11-06-09 0544ET
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