DJ Asian Crude Palm Oil Extends Gains On Short Covering, Weather 08.11.2011
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange extended gains Tuesday, rising to a seven-week high on short covering ahead of key industry data due later this week.
Worries that the annual monsoon will disrupt harvesting progress also boosted sentiment, trade participants said.
The benchmark January contract on the Bursa Malaysia Derivatives exchange ended 1.1% higher at MYR3,045 a metric ton after rising as much as 1.2% to MYR3,048/ton, the highest since Sept. 21.
CBOT December soyoil rebounded during Asian hours, and was last up 0.4% at 51.40 cents a pound at 1000 GMT.
La Nina events usually result in above-average rainfall in Southeast Asia and could slow harvesting progress in Malaysia and Indonesia, which together produce 90% of the world's palm oil.
"Uncertainties over CPO output in Southeast Asia have encouraged traders to maintain a risk premium in the market," an analyst at a Singapore-based bank said.
"Technical cues suggest the market is overbought. Concerns about Italy's fiscal stability and the long list of industry data due later this week will keep prices in check," a commodities broker in Kuala Lumpur said, tipping immediate resistance at MYR3,050/ton.
The state-linked Malaysian Palm Oil Board will issue crop data for October Thursday, while the U.S. Department of Agriculture's global supply-demand estimates for oilseeds and grains is expected Wednesday.
In the cash market, refined palm olein for November was offered unchanged at $1,040/ton, free on board Malaysian ports, a physical market broker in Singapore said.
Cash CPO for prompt shipment was offered MYR30 higher at MYR3,060/ton.
Open interest on the BMD was 131,177 lots, versus 131,461 lots Friday. One lot is equivalent to 25 tons.
A total of 25,610 lots of CPO were traded versus 18,255 lots Friday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT: Month Close Previous Change High Low Nov'11 3,050 3,023 +27 3,050 3,010 Dec'11 3,050 3,021 +29 3,052 2,995 Jan'12 3,045 3,013 +32 3,048 2,984 Feb'12 3,046 3,020 +26 3,046 2,983