Morgan Stanley says market “now accepts that the 2H10 CPO production recovery will be weak, but may underestimate the persistent weakness in 1H11, which in our view will be followed by a supply rebound in 2H11.”

Raises CPO price estimates; tips 2010/2011/2012 CPO price (CIF) at US$885/US$990/US$980 per tonne, average 9.0% above previous numbers, which to drive higher upstream earnings forecasts.