KUALA LUMPUR: Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are likely to experience profit-taking next week following a rally in prices for the commodity in the past two weeks, said a dealer.
Interband Group of Companies senior trader Jim Teh said industry players would also be awaiting the release of trade statistics from the Malaysian Palm Palm Oil Board (MPOB) for July, expected on Tuesday, to get a clearer picture of the next direction for the market. "For the futures market (papers trading), they will be hoping that prices will go up on speculative play.
"However, on the physical buying segment, it is seen lacking as main buyer China is cautious over its purchase as there is plenty of stocks in Indonesia which has roughly over four million tonnes, while Malaysia probably has half of that,” he told Bernama.
Besides, he said there are other vegetable oil for China to choose from, including soybean and sunflowerseed oil.
He said the CPO market is anticipated to trade between the level of RM2,000 per tonne and resistance level at RM2,100 per tonne next week due to the short trading week.
For the week just ended, the CPO futures were traded firmer, tracking the soybean oil market performance, oil prices and the weaker ringgit against the US dollar amid the intensified trade dispute between the US and China.
On a Friday-to-Friday basis, August 2019 rose RM128 to RM2,141 per tonne, September 2019 increased RM118 to RM2,150 per tonne, October 2019 improved RM117 to RM2,179 a tonne, and November 2019 gained RM107 to RM2,200 per tonne.
Weekly turnover expanded to 222,407 lots from 141,590 lots in the previous week, while open interest was higher at 246,379 contracts from 238,131 contracts previously.
On the physical market, the CPO market for August South surged RM120 to RM2,130 a tonne.
The Kuala Lumpur rubber market will be closed on Monday in lieu of the Aidiladha celebration which falls on Sunday. The market will commence operations on Tuesday. - Bernama