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KUALA LUMPUR: Crude Palm Oil (CPO) futures contract on Bursa Malaysia Derivatives expected to further consolidate next week with profit-taking episodes despite fundamental uptrend strong due to lower production and a smaller quantity of stocks.
Interband Group of Companies senior palm oil trader Jim Teh said the price would likely hover between RM3,200 and RM3,300 per tonne.
“Most buyers buy when they need to,” he told Bernama.
Meanwhile, the Council of Palm Oil Producing Countries (CPOPC) is of the opinion that palm oil prices are likely to remain high in the first half of 2021, amid less crushing of soybeans in Argentina and rising of sunflower oil prices.
He said another key factor to consider is the weather pattern and the severity of La Niña going forward.
For the week just ended, the CPO price was mostly higher, influenced by a stronger performance of soybean oil on the Dalian Commodity Exchange in China and the Chicago Stock Exchange (CBOT) in the US.
The price went from negative to positive territory as Indonesia tried to impose a higher levy on crude palm oil starting in mid-December, making Malaysian crude palm oil more attractive.
The gains were in line with the uptrend of the physical price, which rose to a high of more than nine years.
From Friday to Friday, the CPO futures contract for December 2020 increased RM140 to RM3,645 per ton, January 2021 increased RM151 to RM3,552 per ton, and February 2021 increased RM99 to RM3,437 per ton while February 2021 added RM74 to RM3,338.
Weekly volume decreased to 282,610 lots from 347,718 lots in the prior week, while open interest dropped to 240,256 contracts from 275,355 contracts a week earlier.
On the physical market, November South stood at RM 3,690 per tonne. – Bernama
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