Correction Seen for CPO Market

Crude palm oil (CPO) futures on Bursa Malaysia Derivatives is expected to be cautiously traded on concerns over dwindling demand, dealers said.

“The CPO market is likely to correct itself further as overseas demand slips with China staying away from the market following its eight-day National Day holidays that began on Thursday,” a dealer said.

“The latest export forecast figures by cargo surveyors for September may also weighed down on prices,” he added.

Cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS) are due to release export data for the first 10 days of October later next week.

“The general feeling is that exports for October 1-10 may be slow,” another dealer said.

For next week, most traders see a downward bias in range-bound trading, with the support level pegged at RM2,030 per tonne and resistance at RM2,180 per tonne.

On the other hand, the local CPO market is expected to track closely the U.S. soyoil futures and crude oil prices.

For the week just ended, October CPO futures slipped RM105 to RM2,130 per tonne, November gave up RM153 to RM2,048 per tonne, December dropped RM149 to RM2,037 per tonne while January fell RM137 to RM2,040 per tonne.

Weekly turnover increased to 68,643 lots from 42,878 lots last week.

Open interest climbed to 94,276 contracts on Friday from 89,892 contracts recorded at the end of last week.

On the physical market, October South declined to RM2,150 per tonne from RM2,250 per tonne previously. Source : Business Times


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