Trading on the crude palm oil (CPO) futures market on Bursa Malaysia
Derivatives is likely to be rangebound next week given the mixed
sentiment towards the Euro-zone crisis and production outlook, said a
“As much as there are signs of recovery, some investors remain
sceptical on the outlook, especially now that crude oil prices were
hovering around US$77 per barrel,” he said.
Some traders anticipate prices to gain from the impact of the La
Nina weather condition which usually resulted in more rain and floods.
Meanwhile, OSK Investment Bank is of the opinion that the La Nina
factor may push up production in both Malaysia and Indonesia.
“Periods of increased rainfall are generally positive for fruit
production of the water hungry oil palm,” analyst Alwin Tai was quoted
Elsewhere, Macquarie Capital Securities (Malaysia) Sdn Bhd analyst
Sunaina Dhanuka was quoted as saying in a report that palm oil prices
may decline in the third-quarter because of increased supply of tropical
oils and its substitutes.
“In the near term, fundamentals remain weak and will continue to
pressure prices which will be driven by record soybean stocks,” she
Elsewhere, cargo surveyors Societe Generale de Surveillance (SGS)
and Intelek Testing Services are expected to disclose the palm oil
export data for the first 20 days of June on Monday.
For the week just-ended, SGS announced that palm oil exports for the
first 15 days of June fell two per cent to 608,324 tonnes, from 620,517
tonnes, recorded in the same period last month.
Prices remained low throughout the week as investors were cautious
over the Euro debt crisis, sluggish demand for palm oil and production
On a Friday-to-Friday basis, July jumped RM40 to RM2,470 per tonne,
August surged RM94 to RM2,430 and Sept advanced RM40 to RM2,400.
Weekly turnover fell to 71,232 lots, from 81,869 lots last week,
while the open position on Friday stood at 78,027 contracts versus
77,512 contracts last Friday.
On the physical market, June South ended the week RM30 lower at
RM2,510 per tonne.– Bernama
Source : Business Times