FCPO Related News

Crude palm oil futures on Malaysia’s derivatives exchange ended lower Tuesday as investors booked profits but the downside appeared limited by concerns that annual floods in key growing regions could disrupt harvesting. The benchmark January contract at Bursa Malaysia Derivatives ended 1.4% lower at 2,540 ringgit a metric ton after moving in a range of MYR2,520-MYR2,560/ton.

A disruption of harvesting at a time of strong export demand may prevent a further buildup of stockpiles, which hit an all-time high of 2.48 million tons at the end of September. Prices aren’t likely to fall further because palm oil’s narrowing premium to crude oil has increased palm oil’s appeal for use in biodiesel. Palm oil generally trades at a premium of $10 a barrel to crude oil, but it has narrowed to $5.80 a barrel, making it viable for biodiesel, Alvin Tai, a senior analyst at OSK Investment Bank, said in a note.

"Unless external market conditions turn bearish, we think palm oil could trade around MYR2,400-MYR2,550/ton for the rest of holiday-shortened week," a physical market broker in Kuala Lumpur said. "Indian buyers have been buying Malaysian CPO so that has helped to underpin the market."               

[Dow Jones Newswire]