CPO futures hit 38-week intraday high

 

CPO FUTURES

MALAYSIAN palm futures hit a 38-week intraday high yesterday, tracking soya which soared on fears of tight global vegetable oil supplies, but gave up some gains in late selling, traders said.

"I think the main driver was soya prices. Our own (palm) fundamentals are a non-factor today. But prices moved too fast so people were tempted to take profits," said a trader at a Kuala Lumpur-based commodities brokerage.

The benchmark July contract rose RM107, or 4.1 per cent, to RM2,702 per tonne, after going as high as RM2,798, the strongest intraday level since August 8 last year.

Other traded months rose between RM104 and RM203. Overall volume more than tripled the usual at 36,748 lots of 25 tonnes each.

Traders said fears over tightness in global vegetable oils have sent soya bean prices to a seven-month high and spurred heavy buying in palm oil futures. News about a reduction in the soya crop in Argentina, the world's third biggest exporter, heightened fears.

Argentina's 2008/09 soya harvest is seen dropping to 34 million tonnes from a previous estimate of 36.2 million, due to poor yields, the Buenos Aires Grains Exchange said last Wednesday.

"That is a very big reduction and we were actually not ready for that kind of reduction," another trader said.

US soyaoil for May shipment rose 2.0 per cent in Asian trade and the most-active September soyaoil contract on Dalian's Commodity Exchange surged 4.98 per cent.

The price of tropical oil - used in products ranging from soap to biodiesel - has gained 59 per cent this year, mainly driven by fears of falling palm stocks in the world's number 2 producer.

In the physical market, palm oil for May delivery was sold between RM2,850-RM2,880 per tonne in the southern and central regions.

RUBBER

MALAYSIAN rubber prices ended higher yesterday in tandem with the upward trend of rubber futures in the regional markets, dealers said.

"The local market is taking the cue from the rubber futures market in Thailand and Indonesia, which were traded relatively steadier today," a dealer said.

Expectations of tight supplies situation soon had also helped to lift the local rubber prices.

At noon, the Malaysian Rubber Board's official physical price for tyre-grade SMR 20 went up 5.5 sen to 565.50 sen per kg from 560 sen per kg last Friday and lates in bulk rose 6.5 sen to 418.50 sen per kg from 412 sen per kg.

The unofficial sellers' price for tyre-grade SMR 20 advanced seven sen to 569.50 sen per kg from 562.50 sen per kg and latex in bulk was 2.5 sen higher at 420 sen per kg from 417.50 sen per kg previously.

TIN

THE Kuala Lumpur Tin Market (KLTM) ended higher yesterday by US$250 (US$1.00 = RM3.59) to settle at US$12,750 per tonne, following strong overseas demand, dealers said.

The uptrend was also in line with the gains on the London Metal Exchange (LME) that provided a further boost to the local market, they said.

The tin price on the influential LME increased by US$265 to US$12,450 per tonne. On the local front, turnover declined to 46 tonnes compared with last Thursday's closing of 104 tonnes.

The market was closed last Friday for Labour Day.

At the opening level, buyers made bids for 50 tonnes while offers were at 40 tonnes.

The price differential between the KLTM and the LME was unchanged at last Thursday's US$530. - Agencies