CPO futures to trend higher next week


KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trend higher next week underpinned by improving exports and weaker output.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said CPO futures still have legs to climb higher as traders anticipated that heavy rains in Kalimantan, Indonesia would disrupt harvest and this would likely drive prices higher.

Cargo surveyor Intertek Testing Services reported that Malaysia's palm oil exports in the July 1-15 period fell to 831,155 tonnes from 914,120 tonnes in June 1-15 period, down 9.08 per cent. Exports for the July 1-10 period amounted to 448,516 tonnes against 545,360 tonnes in June 1-10, a decline of 17.76 per cent.

Sathia said the CPO market will focus on July 1-20 production estimate from the Malaysian Palm Oil Association (MPOA) next week for market direction.

Meanwhile, Interband Group of Companies Senior Palm Oil Trader Jim Teh said traders also expected increasing demand for CPO from China, Pakistan and India.

However, Teh said with the price at the higher end, the market could trigger some speculative play and profit-taking.

"The price movement next week is expected to confine between RM2,400 and RM2,520 per tonne,” he added.

For the week just ended, the CPO futures were traded higher mainly driven by the prospect of lower production this month due to stressed rubber trees and lower fertilisation rate, as well as weaker ringgit which makes the local commodity more attractive to traders.

On a Friday-to-Friday basis, the CPO futures contract for August 2020 rose RM138 to RM2,605 per tonne, September 2020 surged RM98 to RM2,554 per tonne, October 2020 added RM108 to RM2,520 per tonne, and November 2020 jumped RM116 to RM2,500 per tonne.

Weekly volume increased to 278,651 lots from 215,356 lots last Friday while open interest slid to 246,199 contracts from 249,900 contracts.

On the physical market, August South advanced RM226 to RM2,700 per tonne. - Bernama

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

   

Did you find this article insightful?

Yes
No

100% readers found this article insightful

Next In Business News

US corporate share buybacks are on the rise, lifting investor hopes
MITI: Govt can consider tightening Covid-19 SOPs to prevent outbreaks
Construction steel prices climb on higher iron ore cost, tight supply
KNM unit secures RM30mil supply job�
Dr Martens owners to raise US$1.78bil in London IPO
Hartalega quarterly net profit tops RM1bil for the first time as Covid-19 rages on�
IGB REIT says retail centres to bear the brunt of MCO 2.0
KLCI tumbles 20 points; over 1,100 stocks in red
Furniture maker Sern Kou sees 12.3% stake traded off-market
Bioalpha signs MoU with Zuellig Pharma for vaccine distribution

Stories You'll Enjoy


-->