BMD Crude Palm Oil Futures >>> Market Overview

CPO Ends Flat; Late Buying Caps Losses

Crude palm oil futures on Malaysia’s derivatives exchange ended unchanged Friday after a bout of late buying spurred by participants eager to square off positions ahead of a long holiday capped earlier losses, said trade participants.

The benchmark April CPO contract on the Bursa Malaysia Derivatives ended unchanged at the intraday high of MYR2,580 a metric ton, after trading in negative territory for most of the trading day.
Weak soyoil futures in after-hours trade set a downward tone for CPO prices for most part of the trading day, said traders.

Over the course of the Asian trading day, soyoil futures on the electronic Chicago Board of Trade were down around 20 points. CPO prices made corresponding losses as a result of a lack of fresh, bullish local cues.

Trade was also thin and sluggish as many companies and participants had already started the holiday early.

The BMD will remain closed Monday and Tuesday for the Lunar New Year holidays but many companies in China, Malaysia and Singapore have started to close for the holidays to allow employees time to make their journey home for the annual celebration.

In a note from UOB Kay Hian, CPO prices are tipped to trade in the MYR2,380-MYR2,550/ton range this year, citing Chinese demand as a possible bearish cue that may significantly impact CPO prices.

Uncertainty over the impact of China's credit tightening may weigh on CPO prices as demand from the world's largest palm oil user is uncertain in the short term due to cancellations and difficulties in getting letters of credit for imports, according to the note.

In the cash market, palm olein for April/May/June traded at $790/ton, said a Singapore-based trader.
Cash CPO for prompt shipment was offered MYR10 lower at MYR2,590/ton.
Open interest on the BMD was 78,551 lots Friday, up from 77,624 lots. One lot is equivalent to 25 tons.
Some 8,789 lots of CPO were traded versus 12,763 lots Thursday.