CPO KUALA LUMPUR

The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to see profit taking this week as oversupply concerns loom in line with the seasonal trend, said a dealer.

This is more so in a short-trading week as investors will avoid taking long positions. This week, the market is closed for the Yang Di-Pertuan Agong’s Birthday (today) and Awal Muharram (tomorrow).

Interband Group of Companies senior trader Jim Teh said the CPO price will likely be trading at a lower range of between RM2,130 and RM2,180 per tonne this week.

The Malaysian Palm Oil Board (MPOB) is expected to announce the inventories for the first 10 days of September.

MPOB reported a 1.26% monthly rise in July inventory levels to 2.21 million tonnes from 2.18 million tonnes at endJune.

The data also showed production rose 12.79% to 1.5 million tonnes from 1.33 million tonnes and palm oil exports were up 6.75% at 1.20 million tonnes from 1.12 million tonnes the previous month.

On a Friday-to-Thursday basis, September 2018 and October 2018 rose RM13 to RM2,213 and RM2,244 per tonne respectively, while November 2018 added RM18 to RM2,266 and December 2018 was RM21 higher at RM2,294 per tonne.

Weekly turnover declined to 130,674 lots from 147,529 lots previously, while open interest was lower at 284,244 contracts versus 303,962 contracts the previous week.

On the physical market, September South was at RM2,230 per tonne, up RM15 from the previous week's RM2,215 per tonne.