KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives
exchange ended lower for the second consecutive day Tuesday on volatile trade
amid uncertainties over upcoming demand for feed grains and oilseeds due to
outbreak of swine flu, said trade participants.

  The benchmark July contract on Bursa Malaysia Derivatives ended MYR25 lower
at MYR2,456 a metric ton, after moving in a wide range between MYR2,422 and
MYR2,530.

  Prices moved in both positive and negative territories several times during
intraday trading.

  "There is some buying support, but intraday traders are quickly liquidating
long positions as there is still uncertainty over how long the swine flu will
last," said a Kuala Lumpur-based broker.

  Traders said if soy complex eases further tonight on the Chicago Board of
Trade, CPO prices may fall close to MYR2,400 in the near-term.

  Tuesday, CPO futures opened higher and quickly moved above MYR2,500/ton.

  "The swine flu threat led to a knee-jerk reaction (yesterday). This is
understandable because people in the Far East (Asia) remember the SARS problem
(of 2003) vividly," said a U.K-based commodities analyst.

  He said Malaysia's palm oil industry can barely meet its export commitments
because stocks have fallen below 1.40 million tons and cautioned that if
inventories fall close to 1.20 million tons, prices may rise further until
there is an easing of demand.

  According to government data, Malaysia's end-month palm oil inventories
reached a 20-month low of 1.36 million tons in March.   "If swine flu is
controlled and demand for feed meal isn't curtailed, there is still upside
potential in vegetable oils and oilseeds prices until early July," said a Kuala
Lumpur-based executive at a global trading company.

  The open interest in CPO on the BMD fell to 85,628 lots from 85,708 lots
Monday. The traded volume fell to 16,596 lots from 20,253 lots. One lot
comprises 25 tons.

  Cash palm olein for July/August/September traded at $725/ton down from $735,
said a trader in Singapore and added that June shipment traded at $775/ton.

  He said CPO traded at $712.50/ton and $705/ton, free-on-board, Indonesian
ports.

Closing BMD CPO futures prices in MYR/ton at 1000 GMT:

Month      Close    Previous   Change   High    Low
May 09     2,650    2,655      Dn 05    2,670   2,620
Jun 09     2,554    2,560      Dn 06    2,602   2,504
Jul 09     2,456    2,481      Dn 25    2,530   2,422
Aug 09     2,393    2,418      Dn 25    2,465   2,366