MALAYSIAN crude palm oil futures rose as much as 0.9 per cent today to hit a near-fifteen week high on fears that more rainy weather would cut into production.
Palm oil scaled its highest since Aug 14, largely ignoring weaker crude oil prices and slightly higher export data released by cargo surveyor Intertek Testing Services.
Malaysian planter Genting Plantations has given guidance of lower November and December output due to heavy rains and flash floods for its estates in Sabah — a top oil palm growing state in Borneo island, Kenanga Investment Bank said in a note.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange rose as much as RM23 to RM2,501 (US$740.8). By midday, the most-active contract was trading up RM15 at RM2,493.
“The 2,500-ringgit level is a tough nut to crack,” said a trader with a foreign commodities broker.
“Weather is a great concern and the earlier export data was not so fantastic. We are waiting for Societe Generale de Surveillance data to confirm this.”
Cargo surveyor Intertek Testing Services reported today that Malaysian palm oil exports for Nov 1-25 only rose 1.2 per cent to 1.13 million tonnes from the same period a month ago. SGS will give its estimates later in the day.
Expectations of higher exports come as heavier rains sap palm oil yields in the central state of Pahang and the prospect of floods could complicate the transport of the vegetable oil to refineries and ports.
Oil prices slipped below US$76 a barrel on Tuesday, weighed by the slower-than-expected U.S. growth, although most vegetable oil markets priced in demand-supply factors instead.
U.S. soyoil for Dec. Delivery rose 0.5 per cent in Asian trade on strong import demand and the most-active September soybean oil contract on China’s Dalian Commodity exchange inched higher.
This is certainly a good news for plantation stocks. Personally, I like KLK-CH.
Previous related posts
http://cathoon.blogspot.com/2009/10/klk-ch-50-unrealised-profit.html
http://cathoon.blogspot.com/2009/11/palm-up-on-rising-oil-price-weather.html
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