Palm Futures Likely to Open on Bullish Note - Business Times

Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are likely to stay on current levels with an upside bias next week.

Dealers said the market was anticipated to start on a bullish note on talk that a major plantation company was recording lower output this month. However, there might be price corrections later due to profit-taking as what happened this week, one of them said.

Jim Teh, a senior trader with Interband Group of Companies, said physical prices were expected to stay above RM2,800 despite higher stock levels.

The market would remain cautious over the European and US debt crisis while a neigbouring country's decision to reduce its tax on palm oil exports to reduce inventories might trigger a price war, he added.

Compared with the previous week, the August 2011 contract increased RM17 to RM3,138 per tonne, while September 2011 and October 2011 went up RM25 each to RM3,141 and RM3,140 per tonne respectively. November 2011 ended the week at RM3,139.

The weekly turnover declined to 20,235 lots from 22,251 lots while open position decreased to 135,015 contracts from 136,602 contracts. On the physical market, July South ended the week at RM3,160 per tonne.