In The News - 06/09/2005

Malaysian crude palm oil futures closed off their lows on Monday as short covering helped the market recover from a sharp fall earlier in the day caused

by weak prices of U.S. soyoil.

But trade remained thin due to a lack of other leads, dealers said.

The benchmark third-month crude palm oil on Bursa Malaysia Derivatives, November <KPOX5>, closed at 1,384 ringgit ($368.88) a tonne, down two ringgit from Friday. Its low for the day was 1,377 ringgit.

The broader futures market <0#KPO:> was mixed, closing down three ringgit to up four.

Overall volume was just 2,441 lots of 25 tonnes each. The market typically sees 6,000 lots or more on a busy day.

Palm oil futures were up on Friday as a burst of short covering helped strengthen the market just before the close, although dealers said they could not see much fundamental reasons for the rise.

Dealers had also predicted that November futures might test the key 1,400 ringgit resistance this week after coming close to 1,390 on Friday.

But that bullish forecast appeared to change on Monday, with dealers saying that, barring any spike in CBOT soyoil, palm oil prices might not pick up until next Monday's release of export estimates for the first 10 days of September.

Monday is also the day when the official Malaysian Palm Oil Board releases production, export and closing stocks figures for July.

The market's leading exports surveyor said last week it estimated 8.1 percent growth in August shipments of Malaysian palm oil from July. The market had initially expected an expansion of 15-20 percent.

Soyoil futures on the Chicago Board of Trade were down 0.25-0.45 cent per lb for back months at Friday's close. 

September soyoil <BOU5> fell 0.29 cent.

 ($1=3.76 ringgit)

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