KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade range-bound at between RM2,200 and RM2,300 a tonne next week, on the upside bias.
Palm oil trader David Ng said expectations of stronger export numbers for August, boosted by shipments to India and China coupled with the weaker ringgit, would continue to lend support for the commodity.
"However, we expect prices to remain range-bound on lack of further catalyst, ” he said.
He noted developments surrounding the protracted US-Sino trade war and Brexit which were heading towards a no-deal situation, would also continue to weigh on the market sentiment.
Meanwhile, Interband Group of Companies senior trader Jim Teh said CPO prices had been on the uptrend for the last two to three weeks despite the high stocks of about 2.4 million tonnes in the country.
"Hence, the physical buyers are expected to adopt a wait-and-see attitude before pushing the prices higher, ” he told Bernama.
During the week just-ended, the CPO futures traded mixed, tracking movements of closely competing edible oils as well as the ringgit versus the US dollar.
On a Friday-to-Friday basis, CPO futures contracts for September 2019 dropped RM42 to RM2,168 a tonne, October 2019 fell RM34 to RM2,210 a tonne, November 2019 slipped RM28 to RM2,234 a tonne and December 2019 shed RM23 to RM2,259 a tonne.
Weekly turnover expanded to 247,132 lots from 235,201 lots in the previous week, while open interest was lower at 217,613 contracts from 220,683 contracts previously.
On the physical market, the CPO market for September South fell RM30 to RM2,170 a tonne from RM2,200 a tonne previously.
The CPO futures market will be closed on Monday in lieu of Awal Muharram public holiday which falls on Sunday. The operations will resume on Tuesday. - Bernama
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