The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives

is likely to fetch RM3,600 per tonne over the next 12 months, says a

market strategist.

Benny Lee, the Chief Market Strategist for NextView Group, which

provides real-time investment tools for both professional and retail

investors, said technical factors point towards higher palm oil prices

in the next one year.

“For the short-term period, in the next three months, I think the price will range between RM3,000 and RM3,300 per tonne.

“We are looking at RM3,300 per tonne for the short-term and it will

pull back a bit to RM3,000 before I expect it to surge to RM3,600 in the

long-term,” Lee told Bernama.

as long as current prices stayed above the support level of RM2,550 per

tonne.

Lee earlier presented a paper at the Malaysia-Egypt Palm Oil Trade

Fair and Seminar 2010 (POTS Egypt 2010) which was held here on Monday,

jointly organised by the Malaysian Palm Oil Council and the Malaysian

Palm Oil Board in collaboration with Egypt’s General Authority for

Investment and Chamber of Food Industries Egypt.

The seminar was held in conjunction with the two-day palm oil

promotion mission to Egypt, beginning Nov 7, led by MPOC Chairman Datuk

Lee Yeow Chor.

In his paper, Lee, who is also a trader, trainer and sought-after

speaker in the financial markets, said there has been many forecasts in

the past few months but “I think most of them were based on fundamental

factors which has already been discounted by the market.”

However, he pointed out when technical factors are taken into consideration, market studies should also include others factors.

“It should not be merely based on production, exports or stock

figures. I will also take into account what the market thinks about the

current price trends.

With all these information in hand, one can technically chart the

direction of the market to determine if prices will move higher or

lower,” he explained.

“It is more difficult to determine what is going to be expected

next, and in my opinion, the best way is still to look at the charts,”

he said.

Lee disclosed that the price trend for cpo continued to remain

bullish and is currently above the short-to-long-term 30 to 90-day

moving average.

The short-term 30-day moving average is currently around RM2,645 per

tonne while the longer-term 90-day moving average is about RM2,530 per

tonne.

He said this was a healthy trend as the averages continued to increase with higher open interest positions supporting the trend.

Fundamentally, prices were likely to increase due to higher demand

with the onslaught of the year-end festive seasons and cheaper edible

oil alternatives, lower production and weakening US dollar.

Yesterday, CPO prices continued to rally higher hovering, between RM3,392 and RM3,404 per tonne, prompted by weaker production.

However, dealers said further gains were capped amid some correction

after MPOB reported on Wednesday that palm oil stocks rose to a

nine-month high in October. — BERNAMA