CPO Futures Set to be Firmer

Crude

palm oil (CPO) futures on Bursa Malaysia Derivatives is likely to be

firmer next week following easing fears over inflationary pressures in

China and the Ireland financial crisis.

“There will be some speculative play next week as China has

implemented a subsidy system instead of increasing interest rates,

alleviating concerns that the measures may put a constraint on commodity

demand,” a dealer said.

He added that the local edible oil market was still firm with

resistance expected at the RM3,450 per tonne level and strong support at

RM3,200 per tonne.

“The market is still extremely volatile as external leads are determining the mood of the market,” he said.


Meanwhile, another dealer said developments surrounding Ireland’s debt crisis may influence the market as well.

He expects CPO futures contracts to be traded between RM3,100 per tonne and RM3,400 per tonne throughout next week.

According to Bursa Malaysia Derivatives, turnover reached an

all-time high of 41,879 contracts on Thursday, surpassing the previous

record of 37,231 contracts achieved on June 13, 2007.

“The record high achievement is attributed to higher market

volatility, supported by heighted interest by local and international

traders,” Bursa Malaysia Bhd chief executive officer Datuk Yusli Mohamed

Yusoff said in a statement.

On a Friday-to-Friday basis, December 2010 shed RM12 to RM3,337,

January 2011 declined RM3 to RM3,350 and February 2011 lost RM25 to

RM3,326.

Weekly volume was lower at 115,253 lots from last week’s 130,668

lots while open interest stood at 75,676 contracts compared with 74,477

contracts, previously.

On the physical market, November South ended the week RM10 lower at RM3,350. — Bernama

Source : Business Times

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