Asian Crude Palm Oil Ends Up On Soyoil, Export Outlook

Crude palm oil futures on Malaysia's derivatives exchange ended higher Tuesday, tracking strong soyoil gains in after-hours trade and the Dalian Commodity Exchange. Anticipation of strong exports, which will likely not taper off in the near future, due to festive purchases by major vegetable oil buyers such as Indonesia and India, also helped support CPO prices, said trade participants.
The benchmark October CPO contract on the Bursa Malaysia Derivatives ended MYR42 higher at MYR2,140 a metric ton, after trading in a MYR2,106-MYR2,146/ton range. At the BMD close, soyoil futures were up around 40-50 points.

Traders said they expect exports to be strong on-month. Monday, cargo surveyor Intertek Agri Services estimated that Malaysia''s palm oil exports during the July 1-25 period rose 10% on month to 1.12 million tons. Another cargo surveyor, SGS (Malaysia) Bhd., pegged exports at 1.10 million tons, also up 10% on month.
The next set of data for July 1-31 exports is due Friday, and traders said exports will likely be up on month by around 10%.
"Festive buying ahead of Eid and Diwali is a main reason exports won''t decline in the near-term, and this is providing good support for CPO prices," said a Singapore-based trader.

But trade was sluggish, with prices remaining within a narrow MYR40 range.
"While the market is tracking external cues such as higher soyoil on e-CBOT and the Dalian Commodity Exchange, follow-through buying momentum is still weak," which accounts for the rangebound trade, said a Kuala Lumpur-based trading executive.
In the cash market, cash palm olein for August shipment traded at $665/ton and October/November/December at $650/ton, FOB Malaysian ports, said the Singapore-based trader.
Cash CPO for prompt shipment was offered MYR30 higher at MYR2,200/ton.
The trading volume of CPO futures rose to 16,498 lots from 9,944 lots Monday, while the open interest rose to 83,113 lots from 81,828 lots. One lot equals 25 tons.