KUALA LUMPUR:(February 21 2004) Malaysian crude palm oil (CPO) futures broke the 1,950-ringgit-a tonne psychological barrier on Friday and dealers said the market was poised for new five-year highs of 2,000 ringgit.

An overnight rally in rival Chicago soyoil, and friendly palm oil export data for February 1-20 — indicating a rebound from a dismal performance just days ago — fired the market.

Soyoil futures on the Chicago Board of Trade, which often dictate direction for Malaysian CPO, surged on Thursday, withthe key March contract ending 1.05 cent up at 32.47 cents after a 15-1/2-year top of 32.55 cents.

On the local front, Societe Generale de Surveillance, the leading cargo surveyor for Malaysian palm oil, said it estimated exports for February 1-2O at 600,939 tonnes, little changed from the 605,618 tonnes it gave for January 1-20.

Just 10 days earlier, SGS said month-on-month exports were estimated to have fallen 100,000 tonnes.

Another cargo surveyor, Intertek Testing Services, said on Friday it had estimated Malaysian palm oil exports for February1-20 at 614,099 tonnes from the 604,194 tonnes for January 1-20.

The combined factors took the third-month CPO contract on the Malaysia Derivatives Exchange (MDEX) past the 1,950-ringgit resistance at the open.

At the close, the benchmark contract, May, stood at 1,955 ringgit a tonne, up 35 ringgit on the day. It had hit a high of 1,968 ringgit and low of 1,950 through the day. Volume on the overall market stood at 4,913 lots.

Dealers said the May contract’s next barrier was 2,000 ringgit, a level last seen in 1998.

On the sidelines of CPO, the MDEX also relaunched its crudepalm kernel futures, which was delisted a decade ago due to lukewarm investor reception.

Just like CPO, the palm kernel contract also trades in lots of 25 tonnes and uses the third-month as a benchmark.

But the relaunch was poorly received, seeing only 93 lots of business. The May contract , however, settled 47 ringgit up at 2,230 ringgit a tonne from a pre-set base price of 2,183 ringgit.

In physical trading of CPO, both February and March saw bids/offers at 1,975/1,980 ringgit a tonne in the southern region.

THE NEWS