Consolidation Seen for CPO Futures

Crude palm oil (CPO) futures on the Bursa Malaysia Derivatives are expected

to trade off their recent record highs next week as the market is

expecting a drop in exports, a dealer said.

He said the market was likely to consolidate next week after touching a 29-month high on Thursday.

“Malaysian exports will slow significantly in December judging from

cargo surveyor data for first ten days of this month that showed a weak

report,” he said.

Exports of Malaysian palm oil products for Dec 1-10 dropped nine

per cent to 351,598 tonnes from 386,762 tonnes shipped during Nov 1-10,

cargo surveyor Societe Generale de Surveillance said on Friday.

“However, a decline in stocks will help to push prices higher,” said the dealer.

The Malaysian Palm Oil Board on Friday reported that palm oil

stocks in November 2010 declined by 8.72 per cent to 1.63 million tonnes

from 1.79 million tonnes the previous month.

It said CPO output for November 2010 declined by 10.85 per cent to 1.45 million tonnes from 1.63 million tonnes in October.

On a Friday-to-Friday basis, the December 2010 contract rose RM70

to RM3,630 per tonne, January 2011 contract surged RM108 to RM3,670 per

tonne, February 2011 climbed RM117 to RM3,633 per tonne and March 2011

increased RM108 to RM3,583 per tonne.

Volume for the week rose to 98,158 lots from 97,458 lots previously

and open position increased to 85,371 contracts from 77,910 contracts

on Friday.

As for the physical market, CPO for December shipment traded higher

at RM3,650 per tonne from RM3,560 per tonne a week earlier. — Bernama

Source : Business Times

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