In The News - 04/07/2005

Malaysian palm oil prices rose, tailing a fresh rebound in Chicago soyoil, but trade was light as investors were wary of building positions ahead a long weekend in the United States.

The Chicago Board of Trade, which trades soybean and soy products, will be closed on Monday for U.S.

Independence Day.

CBOT soyoil futures have led most moves in crude palm oil futures on Bursa Malaysia Derivatives for weeks. The two oils compete for export markets and their prices often move in step.

In Friday's electronic session, the July contract for Chicago soyoil <ZLN5> rose more than 0.30 cent towards 24 cents a pound after sliding 0.93 cent at the end of Thursday's formal trade.

The rebound helped Bursa Malaysia's third-month crude palm oil, September <KPOU5>, end up 4 ringgit after it showed a five ringgit-loss in the first hour of trade.

"It's going to be a long weekend in the U.S. and no one wants to be caught in a long position if the soy market suddenly turns soft on Tuesday," said a palm oil trader, explaining the thinner gains in Kuala Lumpur.

September palm oil fell one percent on Thursday after Societe Generale de Surveillance, the main surveyor of Malaysian oil palm cargoes, said exports dipped 9.5 percent in June from the previous month.

Besides the rebound in the September contract, the broader palm oil futures market <0#KPO:> was up 3 to 4

ringgit on Friday.

Overall volume was 3,760 lots of 25 tonnes each. The exchange usually sees 6,000 lots or more on a busy day.

Argentine soy prices jumped on Friday in another session marked by the influence of movements in Chicago's futures, traders said. 

Soy gained 20 pesos to end at 520 pesos ($181) per tonne in Rosario, Argentina's main grain-exporting port. Trade volume rose to a moderate 40,000 tonnes from 10,000 tonnes on Thursday.

"Soy prices rose because of Chicago and local needs," a trader in Rosario said.

Chicago's soybean futures closed sharply higher on Friday in a rebound after prices fell nearly $1 this week.

Soy for delivery in April/May 2006, which is quoted in dollars, gained $3 to end at $168 per tonne.

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