MARKET DEVELOPMENT
07-01-2005
MARKET TALK
Mkt Awaits MPOB Data6/1/05 KUALA LUMPUR (Dow Jones)--Crude palm oil futures on the BursaMalaysia Derivatives ended little changed for a second straight dayThursday amid sluggish trading as an absence of fresh leads continued tosap interest.The benchmark March CPO moved within a very narrow MYR9 band throughoutthe day before closing MYR1 lower at MYR1,356 a metric ton.Wednesday, the contract ended only MYR2 higher.Earlier in the week, the market fell sharply to reach near 16-monthlows, but since then, prices have been range-bound amid subdued tradinginterest.Thursday's trading volume was a poor 1,838 lots, far below usual levelsof at least 4,000 lots."Sentiment is still quite bearish, but the market is a bit oversold atthe moment so people are backing off and waiting for some fresh leads," atrader said.Traders said market players will be watching soyoil futures in thenear-term for direction as there are no supply and demand data due thisweek.Usually, a crop report from private surveyor Palmis Management Bhd. is atalking point for market players during the first week of each month.However, the industry's sole forecaster has ceased issuing its reports.Market participants are now waiting for official December supply anddemand figures from the government-run Malaysian Palm Oil Board. The dataare due midday Monday.Market expectations are for the MPOB to report a rise in stocks inDecember due to high production.Stocks stood about 1.4 million tons at end-November and are speculatedto have touched record levels of over 1.5 million tons by end-2004,traders said.They said high stocks, if confirmed by the MPOB figures, could pressurepalm oil prices to test the psychological support level of MYR1,300 in thelonger term.Open interest in CPO futures totaled 27,369 lots at the end ofWednesday, down slightly from 27,630 lots the previous day.The cash market was also flat, mirroring the performance of the futuresmarket.RBD palm olein for January/February/March delivery was last offeredunchanged at $387.50/ton.Trading activity was slow, though there was talk of an unconfirmed tradefor January at $387.50/ton, traders said.January CPO, locally delivered, was offered at MYR1,370/ton, down MYR5.
