The bearish sentiment prevailing in the crude palm oil (CPO) market is likely to continue next week with risk sentiment remaining vulnerable due to volatile global markets, dealers said.
CPO futures prices on Bursa Malaysia Derivatives is likely to trade within a narrow range of between RM2,900 and RM3,000 per tonne in the absence of fresh leads.
“There is no immediate catalyst to support the market while external shocks such as increasing fears of worsening global conditions will continue to put pressure on the commodity, a dealer said.
He added that weaker consumption demand ahead coupled with higher production from major producers will keep palm oil prices biased to the downside.
Another dealer, however, said the CPO market could see some support on brisk speculation of last minute edible oil purchases for this month’s Deepavali festival.
“However, the expectation of output oversupply this year, amid the current weak global economic environment, will likely overwhelm any short-term buying interest,” the dealer added.
On a weekly basis, October 2011 dropped RM77 to RM2,928 per tonne, November 2011 fell RM85 to RM2,904 per tonne, December 2011 eased RM87 to RM2,905 per tonne while January 2012 tumbled RM100 to RM2,895 per tonne.
Turnover increased to 138,763 lots, from 98,376 lots, registered last week while open position narrowed to 131,241 contracts, from 135,326 contracts, previously.
On the physical market, the newly-traded October South was quoted at RM2,930 per tonne. — Bernama
Source: Business Times