KUALA LUMPUR: Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives are expected to trade with a downside bias this week as traders stay cautious over possible rising stock.
Palm oil trader David Ng said the weak demand might also continue to put pressure on sentiment.
"As such, the price movement this week is expected to confine between RM3,620 and RM3,800 per tonne," he told Bernama.
For the week just ended, CPO futures were traded mostly higher, tracking the movement of the soyabean oil market and crude oil prices.
On a weekly basis, November 2023 fell RM41 to RM3,675 per tonne and December 2023 decreased RM11 to RM3,739 per tonne.
However, January 2024 gained RM4 to RM3,775 per tonne, February 2024 rose RM11 to RM3,800 per tonne, March 2024 was RM9 higher at RM3,814 per tonne, and April 2024 increased RM14 to RM3,813 per tonne.
Total weekly volume narrowed to 298,477 lots from 318,566 lots in the preceding week, while open interest weakened to 212,089 contracts from 224,055 contracts previously.
The physical CPO price for November South fell RM50 to RM3,690 per tonne from RM3,740 per tonne in the previous week.
Meanwhile, the Malaysian rubber market is expected to trade range-bound with a slight upside this next week mainly due to a tight supply situation.
Denis Low, the past president of the Malaysian Rubber Glove Manufacturers Association, reckons there will be a heightened need to stock up ahead of an expected heavy rainfall as traders may not want to be caught out with a short supply position.
"The Thai Meteorological Department has issued a continuous rainfall weather forecast for 48 provinces and the situation is most severe in the southern region, where 60 per cent of the area is experiencing heavy rainfall.
"There are also reports of heavy rainfall in some rubber-producing regions, thereby hampering productivity. Farmers are already lamenting the persistent rainy days which is jeopardising their income," he told Bernama.
He said the ongoing conflict in Palestine might also affect rubber production. "The volatility in oil prices and the US dollar may influence the price and demand for rubber. Such acute volatility represents uncertainties and may warrant caution," he added.
Another dealer said the commodity will continue to track the performance of regional rubber futures, the strength of the ringgit against the US dollar and crude oil prices.
"Markets operators will continue to monitor developments surrounding the Middle East conflict while keeping an eye on US inflation data later today, as well as the outcome of US Federal Reserve policy meeting and other global economic indicators next week," she said.
Week-on-week, the Malaysian Rubber Board's (MRB) reference price for Standard Malaysian Rubber 20 (SMR 20) rose 1.5 sen, or 0.22 per cent, to 693.5 sen per kilogramme (kg) from 692.00 sen per kg previously while latex-in-bulk added 15.5 sen to 558.0 sen per kg.
At 5 pm on Friday, the MRB reference price for physical rubber SMR 20 stood at 689.5 sen per kg while latex-in-bulk was at 556.0 sen per kg. -Bernama