BURSA MALAYSIA >>> FKLI and FCPO Markets Overview 02 Dec 2009

All KLCI Futures contracts ended higher and at premiums
All the KLCI Futures contracts closed higher and continued at premiums Wednesday in line with the positive performance of the global and regional bourses.

The December contract rose 4.5 points to 1,273.0 points, representing a premium of 1.85 points to the underlying against a premium of 1.79 points Tuesday. The contract opened 5.0 points higher at 1,273.5 points and traded between 1,268.5 and 1,275.0 points during the day.

The new January 2010 contract increased 4.0 points to 1,273.5 points, which is a premium of 2.35 points to the cash market against a premium of 2.29 points a day earlier. It traded between 1,270.0 and 1,275.0 points.

The March 2010 and June 2010 contracts both added 3.5 points to close at 1,270 points, also a premium of 2.35 points to the underlying compared with 3.29 points Tuesday.

Crude Palm Oil Ends Down In Thin, Volatile Trade

Crude palm oil futures on Malaysia’s derivatives exchange ended down Wednesday in thin, volatile trade that tracked similar volatility in crude oil and soyoil futures, said traders.

The benchmark February contract on the Bursa Malaysia Derivatives exchange ended MYR6 lower at MYR2,489 a metric ton, after moving in a range of MYR2,480-MYR2,510/ton.

A lack of market participants, many of whom were away at a palm oil conference in Bali, resulted in few cash market trades and sluggish, rangebound trade on the BMD, said traders. Although CPO prices moved between positive and negative territory, the margin was narrow around MYR30.

"It was difficult to ascertain whether prices should trade higher or lower as there were few participants, so real buying/selling interest couldn't be accurately gauged," said a Kuala Lumpur-based trader.

At the end of trade on the BMD, New York Mercantile Exchange light, sweet crude for January delivery was trading 69 cents lower at $77.68 a barrel. The Chicago Board of Trade December soyoil contract was down 8 points at 40.50 cents a pound in electronic trading.

However, traders said CPO prices ending lower today shouldn't be an indication that prices are not well-supported.
China, a major vegetable oil buyer, is expected to stock up on the commodity ahead of its Chinese New Year celebrations due in February, so companies will be looking to buy and sell palm oil in the next few weeks, said a Singapore-based trader.

Malaysian Palm Oil Board Chairman Sabri Ahmad said Wednesday the country's 2010 palm oil output may remain weak, as an aggressive replanting program launched late last year will likely cut output by around 700,000 metric tons a year for three to four years.

"Under the replanting scheme, palm trees must be felled before March 31 next year. Taking this into consideration, palm oil output may only rise by 500,000 tons to 18 million tons in 2010," he told Dow Jones Newswires.

The MPOB is maintaining its forecast for 2009 at 17.5 million tons, even though heavy rains toward the end of the year may disrupt transportation of oil to refineries and ports.

Palm oil prices have risen by MYR300 since early November, touching a three-month high of MYR2,521/ton amid a weakening dollar and fairly resilient export demand. With output at the tail end of its peak production cycle, prices may remain at MYR2,500/ton by the end of the year, Sabri said, as demand from China and India toward the year-end may prevent a sharp increase in reserves.
In the cash market, cash palm olein for January/February/March traded at $767.50-$777.50/ton, said a Singapore-based trading executive.

Cash CPO for prompt delivery was offered MYR10 lower at MYR2,430/ton.
A total of 13,568 lots of CPO were traded on the BMD versus 14,347 lots Tuesday.
Open interest was 90,291 lots Wednesday, down from 91,125 lots. One lot is equivalent to 25 tons.