BURSA MALAYSIA Derivatives Market Overview >>> FKLI and FCPO 18 Nov 2009

All FBM KLCI Futures closed at premiums
Despite the lackluster performance of the underlying, all the KLCI Futures contracts closed at premiums Wednesday. The November and December contracts turned premium while the March and June 2010 contracts widened theirs.

The November contract shed 0.5 points to 1,277.5 points, turning to a premium of 2.40 points to the cash market from a discount of 1.95 points Tuesday. The contract opened 4.0 points higher at 1,282.0 points and traded between 1,284.0 and 1,274.0 points during the day.

The December contract closed unchanged at 1,279.0 points, representing a premium of 3.90 points to the underlying against a discount of 0.95 of a point a day earlier. It traded between 1,284.0 and 1,275.0 points during the day.

The March contract added 1.0 points to 1,284.5 while the June 2010 rose 3.0 points to 1,288.5, representing premiums of 9.40 and 13.40 points respectively.

Crude Palm Oil Ends Up On Weather Concerns, Crude Oil
Crude palm oil futures prices on Malaysia's derivatives exchange ended 2.5% higher Wednesday, at its highest since Aug. 24, following short covering as investors took leads from higher crude prices and heavy rains across oil palm growing regions.

The benchmark February contract on the Bursa Malaysia Derivatives ended MYR58 higher at MYR2,400 a ton, after moving in MYR2,345-MYR2,425/ton range.

"CPO futures may rise to MYR2,450-MYR2,500 in the next two weeks" if crude oil prices remain steady and export demand continues to gather momentum, said a senior executive from a Kuala Lumpur-based trading firm.

Buyers who were buying cautiously for the past few months are gradually turning aggressive, particularly in China, trade participants said.

Unfavorable weather conditions in key growing areas may lead to further tightness in global stocks, prompting buyers to lock in supplies.

Thunderstorms and rains have continued to lash Malaysia's oil palm growing regions, with heavy rains threatening to flood some areas in Johor, according to a spokeswoman from the Malaysian Meteorological Department.

She said localized floods may likely occur in the eastern parts of Johor next week if heavy rains persist.

The weather bureau also upgraded a heavy rain alert for Kelantan and Terengganu areas, stating heavy rains will likely continue until next Tuesday in several areas and may cause floods in areas near rivers.

While the current monsoon isn't likely to eat into palm oil stocks, sentiment is being affected as floods and heavy rains may disrupt oil palm harvesting.

At 1038, GMT light, sweet crude for December on the New York Mercantile Exchange was trading 86 cents higher at $80.00 a barrel.
December soyoil on the Chicago Board of Trade was trading 20 points higher at 40.01 cents/pound on e-CBOT by the end of trade on the BMD.

In the cash market, cash palm olein for November was offered $10 higher at $730/ton; cash palm oil for prompt shipment offered MYR20 higher at MYR2,300/ton.
A total of 15,620 lots of CPO were traded on the BMD versus 15,620 lots Tuesday.
The open interest stood at 94,596 lots Wednesday, down from 96,158 lots. One lot is equivalent to 25 tons.