Crude palm oil (CPO) futures on Bursa Malaysia Derivatives is likely to
consolidate next week after having beached a two-year high this week,
dealers said.
The benchmark third-month CPO contract, January 2011 surged RM83 to
RM3,273 per tonne on Monday, a level last seen on July 18, 2008.
CPO prices remained firm throughout the week, except on Friday when
the market retreated on profit-taking and to the downtrend in other
commodities.
“After the recent rally, the CPO market could see choppy trading
next week. The prices, however, would remain above RM3,000 per tonne
amid continuous demand,” a dealer said.
However, another dealer said CPO prices would remain bullish in the near-term, riding on firm soyabean prices.
Other factors supporting the market were weak production, strong
exports, soyabean shortage and unfavourable weather affecting South
American soyabean planting.
“CPO prices have been rallying not because of fundamentals but due
to tightness in the soyabean market due to a production shortfall in
Brazil, a key producer,” the dealer said.
Meanwhile, Indonesia raised palm oil export taxes which
could mean higher palm oil prices in the near term.
On a Friday-to-Friday basis, the November 2010 and December 2010
contracts surged RM157 each to RM3,337 and RM3,349 per tonne,
respectively while January 2011 jumped RM162 to RM3,353 and February
2011 advanced RM156 to RM3,351.
Total volume increased to 130,668 lots from last week’s 62,299 lots
while open interest stood at 74,477 contracts compared with 72,289
contracts previously.
On the physical market, November South was RM160 higher at RM3,360 per tonne from RM3,200 per tonne last week. — Bernama
Source : Business Times
