Crude Palm Oil Ends Up; Global Vegoil Supply Worries Underpin

Crude palm oil futures on Malaysia’s derivatives exchange ended up Wednesday after choppy trade as investors covered positions amid supply concerns.
Concerns about tight global vegetable oil supplies brought on by bad weather in soy-growing regions in South America and oil-palm growing areas in Malaysia provided the catalysts for palm oil's upside, market participants said.

The benchmark April contract at Bursa Malaysia Derivatives ended 0.6% higher at 2,481 ringgit a metric ton after moving in a choppy MYR2,450-MYR2,488/ton range. Malaysian markets will be closed Thursday for a public holiday.
CBOT March soyoil was up 0.2% at 52.54 cents a pound by the end of trade on the BMD.
"Palm oil is now trading at a hefty discount to rival soyoil. Any weather issues in Latin America will likely drive up soy prices, steering price-conscious importers to palm oil," a vegetable oil exporter in the southern state of Johor said.
Refined palm olein is currently offered $300-$350/ton cheaper than rival soyoil from Argentina, physical market data showed.
Tight global soy supplies and expectations for palm oil demand to improve in the coming months may help reduce record high stockpiles in Malaysia, the world's no. 2 producer, and underpin prices. Palm oil stocks hit an all-time high of 2.63 million tons at end-December, according to a Jan. 10 crop report by industry regulator the Malaysian Palm Oil Board.
In the cash market, refined palm olein for April/May/June shipment was traded at $850-$855/ton and July/August/September shipment traded from $860/ton to $867.50/ton, free on board Malaysian ports, a Singapore-based broker said.
Cash CPO for prompt shipment was offered at MYR2,350/ton.
Open interest on the BMD was 181,117 lots, versus 176,684 lots Tuesday. One lot is equivalent to 25 tons.
A total of 50,452 lots of CPO were traded versus 35,955 lots Tuesday.

 
Ending BMD Crude Palm Oil (CPO) futures prices in MYR/ton: 
 
Month   Close  Previous  Change   High    Low 
Feb'13  2,410     2,412      -2  2,418  2,390 
Mar'13  2,453     2,444      +9  2,459  2,426 
Apr'13  2,481     2,465     +16  2,488  2,450 
May'13  2,508     2,487     +21  2,515  2,476 
 

Write to Shie-Lynn Lim at shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
January 23, 2013 05:48 ET (10:48 GMT)
Copyright (c) 2013 Dow Jones & Company, Inc.