Plantation stocks climb in early trading on gains in soybean oil and corn prices

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KUALA LUMPUR (Oct 14): Plantation counters climbed in early trade today, with Kuala Lumpur Kepong Bhd (KLK) the second top gainer, lifted by robust crude palm oil (CPO)export demand and anticipation for output to weaken.

At 10:58 am, KLK was up 1.8% or 36 sen to RM20.34, with some 63,900 shares done.

PPB Group Bhd also emerged as one of the top gainers, rising 0.86% or 12 sen to RM14.08. Felda Global Ventures Holdings Bhd edged up 0.31% to RM 3.27 after soaring to as high as RM3.32 earlier.

A bank-backed plantation analyst told TheEdge Markets.com that plantation stocks climbed higher in the morning session due also to the price gains on various agriculture commodities such as soybean oil and corn last night.

“We also expect lower inventory [of the various commodities] as they approach the end of the [harvesting] season,” he said.

He is of the view that the rebound is not surprising, especially after weeks of correction in CPO prices.

Bloomberg reported that CPO futures dropped 33.14% to RM1,929 on Aug 29 this year from RM2,885 on March 10. The benchmark December contract on the Bursa Malaysia Derivatives Exchange had inched up 1.1% to RM2,170 per tonne by Friday's close.