CPO Futures Players Eye Bargains

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

next week are expected to be influenced by the stock and export data to

be released on Monday, dealers said.

The Malaysian Palm Oil Board (MPOB) is scheduled to release June’s

import, export, production and stock figures, which may provide a new

impetus for the market.

Cargo surveyors ITS and SGS are also due to release export

estimates for the first 10-days of July on the same day.

Interband Group’s senior trader, Jim Teh said June’s output may

reach 1.9 million metric tonnes.

“This may hurt local sentiment, with demand already weakened and

players staying on the sidelines, waiting for prices to drop further.

“The players on the sidelines are waiting to move in and snap up

bargains when the price drops to around the RM2,000 level,” he added.

He also said that the current higher soy oil supply in Paraguay,

Argentina and Brazil, was also a reason why traders are shying away from

the market.

CPO and soyoil, are commodities, that compete in the same market.

Meanwhile, another dealer said he expects export demand to slip

five per cent month-on-month in June, as consumers could delay purchases

in view of the peak production season.

“The CPO price could rise in the third quarter if the peak

production season turns out weaker than expected due to a poorer CPO

yield, stemming from the drier weather experienced a year ago,” the

dealer explained.

For the week just ended, CPO futures prices closed firmer as

intermittent short-covering activities helped maintain the market’s

steady momentum.

July 2010 closed the week at RM2,430 per tonne, up RM24 compared

with RM2,406 at the end of last week while August 2010 lost RM14 to

RM2,358 per tonne.

September 2010 and October 2010 both shed RM35 to RM2,300 and

RM2,287 per tonne, respectively.

Total turnover for the week, decreased to 70,931 lots from 76,131

lots last week.

Open positions on Friday was at 72,569 contracts, up slighty from

72,093 at the end of last week.

As for the physical market, July South dropped to RM2,430 per

tonne from RM2,440 per tonne previously. — Bernama

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