The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade with a slight upward bias this week due to the recent strength in the crude oil market, said palm oil trader David Ng.
The benchmark Brent crude was trading higher last week and moved from US$93 per barrel to about US$96 per barrel on September 29.
Ng said the stronger export performance numbers would also likely support the CPO market.
"We expect prices to trade between RM3,700 per tonne and RM3,900 per tonne this week," he told Bernama.
For the week just ended, CPO futures were traded mixed, tracking the soybean oil futures market movement on the Chicago Board of Trade and crude oil prices.
On a weekly basis, the October 2023 contract rose RM42 to RM3,689 per tonne, November 2023 added RM73 to RM3,732 per tonne, and December 2023 improved RM86 to RM3,767 per tonne.
January 2024 increased RM83 to RM3,798 per tonne, February 2024 was RM84 higher at RM3,825 per tonne and March 2024 gained RM76 to RM3,842 per tonne.
Total weekly volume decreased to 264,271 lots from 326,641 lots in the preceding week, while open interest strengthened to 221,984 contracts from 214,965 contracts previously.
The physical CPO price for October South added RM20 to RM3,720 per tonne from RM3,700 per tonne in the previous week.
Meanwhile, the Malaysian rubber market is expected to remain steady this week with an upward bias.
Malaysian Rubber Glove Manufacturers Association (Margma) past president Denis Low said incessant rainfall in rubber-producing regions would help push up the rubber prices and demand.
He said the low-pressure area over the central part of the South China Sea has intensified into a tropical depression.
With heavy rain from the tropical depression hitting northern and north-central Vietnam, this would cause flooding and spark warnings of landslides, he said.
Low further noted that this would later move across Thailand along the storm trough. The Thai Meteorological Department has issued a storm warning, with torrential rain predicted across 41 provinces.
"There are warnings of floods and this may affect rubber production. Oil prices remain strong and may be near US$100 a barrel.
"Anyhow, a range of factors could prevent a sustained rally above that level. We need to be cautious as the volatile US dollar may have an impact on demand and prices as well," he told Bernama.
On a weekly basis, the Malaysian Rubber Board's (MRB) reference price for Standard Malaysian Rubber 20 (SMR 20) eased 0.45 per cent lower, or 3.0 sen, to 654.50 sen per kilogramme (kg) from last week's 657.5 sen per kg.
Latex-in-bulk added 2.58 per cent, or 12.5 sen, to 497.50 sen per kg from 485 sen per kg previously.
At 5 pm on Friday, the MRB reference price for physical rubber SMR 20 stood at 652.00 sen per kg while latex-in-bulk was 498.00 sen per kg.
Read more at NST