Crude Palm Oil Rebounds On External Cues, Demand Outlook - Palm OilHq

Crude palm oil futures on Malaysia’s derivatives exchange ended higher Monday, rebounding from last week’s fall in line with broad gains in commodity markets and an improved demand outlook for the tropical oil.

The benchmark July contract on the Bursa Malaysia Derivatives ended MYR43 higher at MYR3,238 a metric ton.

July soyoil on the Chicago Board of Trade was trading 0.7% higher at 56.10 cents a pound in screen trade at 1000 GMT, and June crude oil on the New York Mercantile Exchange was up 2.9% at $100.02 a barrel on Globex.

Palm oil fell to its lowest level in five months Friday amid a selloff in U.S. commodities due to renewed concerns about the global economic recovery, but the relatively positive U.S. employment data issued after the close of Asian markets Friday has helped to spark a recovery in global commodities markets.

The improving demand outlook for the palm oil, a raw material used in a wide range of consumer products, also supported prices on the BMD.

Traders estimate that Malaysian palm oil exports in the May 1-10 period probably reached 300,000-316,000 tons, an increase of 8%-14% from the previous month.

India is expected to buy 500,0000 tons of palm oil in May and possibly up to 550,000-600,000 tons in June to replenish palm oil stocks at ports, traders said.

India sources palm oil from Indonesia and Malaysia and soyoil from Brazil and Argentina to help cover the country’s total vegetable oil consumption.

Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., are likely to issue export estimates for May 1-10 on Tuesday.

However, rising output in Malaysia may hamper palm oil’s rebound, said a Singapore-based trading executive, as private estimates by planters put April production at 1.54 million tons, up nearly 9% from March’s production.

The government-linked Malaysian Palm Oil Board is scheduled to issue April production, stock and export data on Tuesday.

The rupiah-denominated palm oil contract for July delivery on the Indonesia Commodity & Derivatives Exchange was trading 1.3% higher at IDR9,390/ton at 1009 GMT.

CME Group’s dollar-denominated palm oil contract was up $5.25 at $1,087.50/ton at 1010 GMT.

In the physical market, palm olein for October, November, December cargo changed hands at prices from $1,105-$1,110/ton, free on board Malaysian ports, said a physical market broker in Singapore.

Cash CPO for prompt shipment was MYR30 higher at MYR3,380/ton.

Traded volume on the BMD reached 25,344 lots compared with 32,482 lots Friday. One lot is equivalent to 25 tons. Open interest was 111,691 lots versus 110,527 lots.