CPO futures up on strong demand
July 27 2007
CPO FUTURES
CRUDE palm oil futures prices on Bursa Malaysia Derivatives Bhd closed
higher yesterday on the back of active demand, a dealer said.
The market was also up on expectations of better export demand in the coming
months as buyers, particularly from Asia, begin to lock in supplies for several
festivities, he added.
At the close yesterday, spot month August 2007 climbed RM41 to settle at
RM2,660 per tonne, September 2007 jumped by RM48 to RM2,605, October 2007 added
RM47 to RM2,568 and November 2007 gained RM49 to RM2,537.
Volume appreciated to 10,595 lots from Wednesdays 9,286 lots and open
interest was slightly higher at 64,586 contracts against 64,006 contracts
previously.
On the physical market, August South went up by RM40 to RM2,680 per tonne.
RUBBER
MALAYSIAN rubber prices were higher at the close yesterday on steady demand
amid the rising global oil price environment, a dealer said.
The higher oil price makes the natural rubber more attractive than synthetic
rubber which is based on crude oil.
Global oil prices jumped after US Government data showed a drawdown in crude
inventories as refiners ramped up output to keep up with summer gasoline demand
in the worlds top consuming nation.
Global benchmark London Brent crude rose US$1.24 to US$76.32 (US$1.00=RM3.46)
a barrel, while US crude surged US$2.32 to settle at $75.88 a barrel.
According to data from the US Energy Information Administration, crude stocks
in the US fell 1.1 million barrels last week as refiners increased runs to help
meet summer gasoline demand.
Many buyers in the market today, particularly from China and Japan, want to
lock in their supply for the next few months in view of the rising global oil
price, the dealer said.
This is a good sign for the local rubber prices to be in the upward trend,
but I dont know for how long as profit-taking acitivities will limit its
(prices) gains in coming days, he said.
The benchmark rubber contract on the Tokyo Commodity Exchange (Tocom) for
December delivery rose 9.4 yen to settle at 262.6 yen (100 yen = RM2.87) per
kg, while the January 2008 contract added four yen to end at 262.6 yen per kg.
At noon, the Malaysian Rubber Board official physical price for tyre-grade
SMR 20 went up by 1.5 sen to 705.0 sen per kg and latex in bulk added 0.5 sen
to 447.5 sen per kg.
The unofficial sellers closing price for tyre-grade SMR 20 climbed 9 sen to
710.5 sen per kg while latex in bulk gained 4 sen to 449.5 sen per kg.
Tokyo rubber futures soared 3.7 per cent yesterday, after three straight days
of losses, as a weaker yen and rising oil prices prompted fresh buying.
The most active December contract on the Tocom rose 9.4 yen, or 3.7 per cent,
to settle at 262.6 yen per kg, while the newly listed January 2008 contract
climbed 4 yen to end at 261.6 yen.
Dealers said TOCOM prices could rise higher today after the benchmark
finished above the resistance level of 260 yen.
Physical rubber prices rose in line with Tocom prices.
Trading was brisk, with buyers from China, the biggest consumer, seeking Thai
RSS3 around US$2.09 per kg to replenish stocks, traders said.
Other dealers said major tyre makers Goodyear Tire and Rubber Co and
Bridgestone Corp were also buying cargoes for forward months.
Physical rubber prices are expected to remain firm this week because of
limited supplies as rains hit producing countries, disrupting tapping.
TIN
THE Kuala Lumpur Tin Market (KLTM) price hit its new all-time high of
US$15,300 per tonne yesterday amid the uncertainty of supply, dealers said.
The local market performs well despite the fall in prices on the London
Metal Exchange (LME) following continuous concern over supply from Indonesia,
a dealer said.
LME price fell by US$110 to settle at US$15,250.
A dealer said yesterdays upward performance was also supported by strong
demand from Japanese, European and local traders.
On the KLTM, turnover declined to 55 tonnes versus 56 tonnes recorded on
Wednesday.
At the opening level, bids stood at 60 tonnes while offers was 50 tonnes.
The price differential between KLTM and LME widened to US$345 per tonne
compared with US$180 per tonne previously. Bernama
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