Palm Futures to Trade in Tight Range

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives are likely to move in a tight range next week, hovering at between RM2,400 to RM2,490 per tonne, dealers said.

They said the commodities markets in general are expected to lose ground in view of the bearish equities market globally, due to the lingering euro zone debt crisis.

“The overall sentiment in palm oil futures would remain cautious on fresh concerns over the stability of the euro zone. Weaknesses in financial markets is going to curb investors’ appetite for commodities,” a dealer said.

Another dealer however said that, any losses on the Malaysian market, could be offset by bargain-hunting and stock replenishment.
“There is interest from China, Europe and Pakistan to replenish stockpiles.

Activity still remains rather cautious though export numbers by cargo surveyors indicate a jump for the first 25 days of May,” the dealer explained.

During the week, futures prices were traded mixed amid a lack of strong leads and the holiday-shortened week.

The market was closed on Friday for Wesak day.

On Thursday-to-Friday basis, June 2010 declined RM12 to close at RM2,519 per tonne, July 2010 dipped RM11 to RM2,500 per tonne, August 2010 dropped RM34 to RM2,457 per tonne while September 2010 slipped RM51 to RM2,429 per tonne.

Total turnover declined to 46,149 lots from 65,969 lots last week while the open position was lower at 70,974 contracts from 68,244 contracts previously.

On the physical market, the newly-traded June South contract ended the week at RM2,560 per tonne.– Bernama

Source : Business Times

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