Rangebound Trading Ahead for CPO Futures

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

to remain rangebound next week due to volatile conditions in the global

economy, dealers said.

They said demand for vegetable oil would be affected following the

tightening of monetary policy by authorities around the world to help

curb inflation that has sparked market concern.

Meanwhile, players are also adopting a wait-and-see approach ahead

of the release of production, exports and stocks data by the Malaysian

Palm Oil Board on Tuesday.

Other stock data on the same day are from two cargo surveyors, Intertek Testing Services and Societe General de Surveillance.

A dealer said Malaysia’s exports in the first ten days would likely be higher, underpinned by steady demand from India.

CPO prices are expected to move in tandem with that of soyoil prices on the Chicago Board of Trade.

For the week just ended, the market was lower in the absence of investors, except for short covering activities.

The market was closed on Monday for Labour Day.

On a weekly basis, May 2011 was up RM5 to RM3,375 per tonne, June

2011 decreased RM25 to RM3,275 per tonne, July 2011 fell RM34 to RM3,195

per tonne and August 2011 eased RM38 to RM3,187.

Turnover increased to 99,812 lots from 92,653 lots previously,

while the open position stood at 110,527 contracts on Friday from

103,663 contracts previously.

On the physical market, May South ended lower at RM3,350 per

tonne on Friday versus the RM3,380 per tonne last week. — Bernama

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