Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives are likely to trend higher next week due to the
expectation of lower supply for soybean, dealers said.
The dealer said the upcoming US Department of Agriculture report, which was expected to show a smaller soybean supply, was likely to lend support to the CPO prices' performance.
He said CPO market was expected to swing higher early this month, boosted by the expectation of lower CPO stock in February.
The CPO stock report for February would be released by the Malaysian Palm Oil Board on Monday.
However, he said the uptrend would not be sustained for long in view that March is a tax month, whereby the CPO export products would be charge 4.5 per cent tax beginning this month.
"Thus, towards the end of March, the local CPO exports may be lower and hence will put pressure on the commodity prices," he added.
In the meantime, Interband Group Senior Palm Oil Trader Jim Teh told Bernama that the physical CPO prices are expected to move between RM2,300 and RM2,550 a tonne on technical correction.
However, he said the prices would be mainly influenced by the February CPO stock report next week.
On a Friday-to-Friday basis, spot month March 2013 rose RM65 to RM2,415 a tonne, April 2013 added RM70 to RM2,430 a tonne, May 2013 increased RM76 to RM2,444 a tonne and June 2013 advanced RM74 to RM2,451 a tonne.
Weekly turnover declined to 125,470 lots from 197,275 lots last week while open interest fell to 187,911 contracts from 195,630 contracts last Friday.
On the physical market, March South advanced RM80 to RM2,420 per tonne.-- Bernama