CPO Futures Firmer Despite Talk of Higher Stocks

CRUDE palm oil (CPO) futures prices on Bursa Malaysia Derivatives

ended firmer yesterday despite players being cautious of higher CPO

stocks in June, dealers said.

Interband group’s senior trader,

Jim Teh, said buyers were also unwilling to pay at current prices as

they were waiting for prices to drop to the RM2,200 to RM2,000 level

before entering the market.

On Monday, the Malaysian Palm Oil

Board (MPOB) is scheduled to release June’s import, export, production

and stock figures, while Cargo surveyors Intertek Testing services and

Societe Generale de Surveillance are due to release export estimates for

the first 10-days of July.

“It’s a peak period. I think June’s output may reach 1.9 million metric

tonnes,” he said. In May, CPO output 6 per cent month on month to 1.39

million metric tonnes.

Meanwhile, another dealer said if crude

oil prices remained at current levels coupled with a higher production

cycle towards year-end, there may be an impact on prices.

CPO

prices are expected to hit RM2,270 per tonne over the next two or three

months based on the current crude petroleum oil price of US$75 (US$1.00

= RM3.26) per barrel.

Concerns about the global economic

recovery would also weigh on prices, he added.

The July

2010 contract closed RM22 higher at RM2,420 per tonne, August 2010 rose

RM25 to RM2,330 per tonne, September 2010 added RM19 to RM2,289 per

tonne and October 2010 edged up RM25 to RM2,275 per tonne.

Volume

for the day was higher at 14,577 lots compared with Wednesday’s closing

of 13,888 lots while open interest fell to 74,093 contracts from 74,304

contracts previously.

On the physical market, July South

stood at RM2,410 per tonne versus RM2,390 per tonne previously.

Source : Business Times

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