KUALA LUMPUR (February 25 2004): Malaysian crude palm oil (CPO) futures ended mixed on Tuesday as players took profits on four straight days of gains powered by rival soy oil.

The benchmark contract ended down after staying below the 2,000 ringgit a tonne level last seen five years ago. Forward contracts posted double-digit gains while cash trades of palm oil crossed 2,000 ringgit.

The third-month CPO futures contract on the Malaysia Derivatives Exchange, May, closed at the day’s low of 1,950 ringgit ($521.05) a tonne, down two ringgit from its last trade on Friday.

The market was closed on Monday for a national holiday. Dealers had expected the benchmark contract to go beyond 2,000 ringgit at Tuesday’s reopening to catch up with Chicago soyoil’s May futures, which hopped 0.46 cent a lb on Friday and 0.73 cent on Monday.

But CPO’s May contract only managed a high of 1,996 ringgit before scaling back on profit-taking. Palm oil for prompt March and nearby April breached 2,000 ringgit but also eased off on selling.

"I think many people still see 2,000 ringgit as a major resistance and it may take a few more highs in soy oil to convince them that it is attainable," said a trader in CPO futures.

Soy oil and palm oil compete for the same markets and their prices often move in step. Dealers said CPO futures could certainly hit 2,000 ringgit if soy oil remained strong but they expressed doubts if the market could stay there.

Although palm was still the world’s cheapest oil with a discount of least $90 a tonne to soy, consumers may not be able to afford major quantities if prices kept rising, dealers said.

Societe Generale de Surveillance, the leading cargo surveyor for Malaysian palm oil, said on Friday it had estimated exports for the first 20 days of February at 600,939 tonnes, almost at par with the 605,618 tonnes it estimated for January 1-20.

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

THE NEWS