UPDATE: Asian Crude Palm Oil Futures End Down 1%; Lowest This Year

(Adds price charts, comments from trading executives)

By Shie-Lynn Lim
Of DOW JONES NEWSWIRES

KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange fell 1% Friday as investors
liquidated long positions approaching the weekend and ahead of an expected rise in output and stocks, trade participants said.

The benchmark August contract on Bursa Malaysia Derivatives ended MYR24 lower at MYR2,386 a metric ton, its lowest
level this year.

"China has been slow with their palm olein purchases so far. That, along with China's cancellation of several soybean
cargoes from South America due to poor crushing margins, has spooked the market," a senior trading executive at a Kuala
Lumpur-based commodities brokerage said.

A three-day public holiday in China next week exacerbated selling pressure, a trading executive in Singapore said.
Palm prices have declined 11% so far this year. Chinese markets will be closed Monday-Wednesday for the Dragon Boat
Festival holidays.


Prices are also under pressure from expectations of a rise in end-June palm inventory levels due to likely lower
export demand, as some buyers may opt to delay purchases to wait for lower prices with production entering a high cycle,
analyst Ivy Ng from CIMB Research said in a report.

The stronger ringgit "also gave sellers a reason, amid negative market sentiment, to push the market lower," said a
senior trading executive from Kuala Lumpur-based brokerage OSK Investment Bank. The dollar fell to MYR3.2800 from
yesterday's close at MYR3.3000

Malaysian Palm Oil Board data issued Thursday for the January-May period indicated that 2010 output could exceed
2009's 17.6 million tons, an analyst in Singapore said.

In the cash market, palm olein for July at $777.50/ton and October/November/December at $747.50/ton, free-on-board
Malaysian ports, a Singapore-based cash market broker said.

Cash CPO for prompt delivery was offered MYR5 higher at MYR2,540/ton.

CME's Group Inc.'s (CME) dollar-based CPO futures for September were trading $3.75 lower at $718.75/ton around 1015
GMT. One lot is equivalent to 25 tons.

August rupiah-denominated CPO futures on the Indonesia Commodity and Derivative Exchange ended 0.2% lower at IDR6,500
a kilogram with 16 lots traded. One lot is equivalent to 10 tons. The September contract was unchanged at IDR6,420/kg
with 187 lots done.

Open interest on the BMD was 77,512 lots, versus 76,929 lots Thursday. One lot is equivalent to 25 tons.

A total of 19,392 lots of CPO were traded versus 8,641 lots Thursday.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT: 
 
Month   Close  Previous  Change   High    Low 
Jun'10  2,550     2,525  Up   25  2,560   2,540 
Jul'10  2,430     2,450  Down 20  2,462   2,430 
Aug'10  2,386     2,410  Down 24  2,419   2,379 
Sep'10  2,360     2,385  Down 25  2,396   2,357 
 

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

(END) Dow Jones Newswires
06-11-10 0700ET
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