DJ Asian Crude Palm Oil Down; Off Lows On Short Covering Before Fed Speech 29.08.2011
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Bursa Malaysia Derivatives were lower Friday, though they pared earlier losses as traders covered short positions in thin trade ahead of the long holidays next week and a key speech by U.S. Federal Reserve Chairman Ben Bernanke.
Benchmark November CPO earlier fell to a fresh two-week low of MYR2,953 a metric ton, weighed down by weaker soyoil. The contract ended at MYR2,975 a metric ton, down 0.6% from Thursday's settlement.
"Traders and speculative investors are wary about setting up new positions ahead of Bernanke's speech," said a commodities trader in Kuala Lumpur. "Investors aren't too optimistic that the Fed will announce another round of quantitative easing to kickstart the U.S. economy."
The Fed chairman is due to speak at 1400 GMT at a meeting of central bankers in Jackson Hole, Wyo. and some investors expect him to signal plans to boost the flailing U.S. economy.
Palm oil has been under pressure after private estimates by planters pointed to improving supply of the cooking oil in August, contrary to previous forecasts.
"With a slowing pace of demand and better output anticipated in the August-September period, palm oil may drift lower toward MYR2,920/ton in the next few weeks," said S. Paramalingam, executive director at Kuala Lumpur-based brokerage Pelindung Bestari.
Shipments of palm oil during the Aug. 1-25 period reached 1.36 million-1.37 million tons, according to data from cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd.
While the shipment data is higher from the previous month's, average daily volumes shipped from Aug. 21-25 declined to 40,000 tons, from a daily average of 49,000 tons from Aug. 1-20.
SGS is scheduled to issue August palm oil shipments Monday and Intertek Friday.
The BMD will be closed for the Eid ul-Fitr holidays from midday Monday through Thursday. The market reopens on Sept. 2.
In the cash market, refined palm olein for September was offered at $1,145/ton.
Cash CPO for prompt shipment was offered MYR10 lower at MYR3,110/ton.
Traded volume on the BMD reached 23,561 lots, up from 20,796 Thursday. One lot equals 25 tons.
Open interest was 127,529 contracts compared with 130,218 contracts Thursday.
Closing BMD CPO futures prices in MYR/ton at 1030 GMT: Month Close Previous Change High Low Sep'11 3,100 3,108 Down 8 3,100 3,075 Oct'11 3,016 3,030 Down 14 3,031 2,995 Nov'11 2,975 2,994 Down 19 2,996 2,953 Dec'11 2,970 2,980 Down 10 2,977 2,942