KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to head lower with the benchmark month hovering between RM2,500 and RM2,450 per tonne.
Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said Malaysian Palm Oil Board's data to be released on Monday was crucial to determine the official market's supply and demand in October and price guidance going forward.
The release of export estimates statistics for Nov 1 - 10 and Nov 1 -15 by Societe Generale de Surveillance, Intertek Testing Services (ITS) and Amspec Malaysia is also set to give an impact on price direction next week.
Sathia, quoting ITS, said exports were likely to drop by 15.55 per cent to 172,580 tonnes in the Nov 1-5 period compared with 204,350 tonnes in the Oct 1-5 period.
"Prices will trade according to fundamentals and less on technical," he told Bernama, adding that there was also a possibility exports may not be so high in November.
This, he said, was not a good indicator to the market.
In addition, the present stronger ringgit also made the tropical vegetable oil less attractive and dampening demand, Sathia noted.
On Friday, the ringgit stood at 4.1310 against the greenback after hitting a four-month high on Thursday at 4.1225.
Throughout the week, the market was mostly higher with benchmark January 2020 hovering at its highest level in 22 months as concerns of a potential palm oil supply shortfall propelled stock-up activities.
On a Friday-to-Friday basis, the CPO futures contract for November 2019 jumped RM145 to RM2,526 per tonne, December 2019 increased RM92 to RM2,524 per tonne, January 2020 put on RM111 to RM2,573 per tonne, and February 2020 was RM125 higher at RM2,600 per tonne.
Weekly turnover rose to 287,775 lots from 238,435 lots in the previous week, and open interest widened to 285,101 contracts from 253,537 contracts previously.
On the physical market, the CPO price for November South gained RM100 to RM2,480 per tonne.
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