KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trade in a yo-yo mode next week amid profit-taking, after trading in an upbeat momentum over the past week, said a dealer.
Interband Group of Companies senior trader Jim Teh said trading would likely range between RM2,600 and RM2,700 a tonne on speculative play ahead of the Malaysian Palm Oil Board's (MPOB) key crop report for July on Monday.
The overall market expectation was bullish with an estimation of lower production and lower stock in the month, he said.
Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said the market will be looking to MPOB at the start of the week for price guidance.
"Expectation of MPOB bullish data is widely priced-in. Attention will be on the extent of fall in stocks, which is seen plunging to a three-year low,” he said.
However, prices could be dragged lower from wider negative external developments emanating from US-China trade tension after the two countries’ spat on technology companies and in anticipation that the second phase of trade was not going ahead, he told Bernama.
For the week just ended, the CPO futures contract traded mixed, taking the cue from soybean oil prices on the Chicago Board of Trade, movement of the ringgit against US dollar, as well as the expectation of lower production and stock in July, which sparked the surge in demand and lifted the commodity price higher.
On a Thursday to Friday basis, the CPO futures contract for August 2020 surged RM105 to RM2,885 per tonne, September 2020 rose RM99 to RM2,824 per tonne, October 2020 gained RM81 to RM2,758 per tonne, and November 2020 advanced RM76 to RM2,716 per tonne.
Weekly volume expanded to 256,363 lots from the previous week's 221,137 lots while open interest widened to 228,714 contracts from 221,137 contracts a week earlier.
On the physical market, August South eased RM10 to RM2,890 per tonne. - Reuters
Did you find this article insightful?
100% readers found this article insightful