CPO futures rebound on short covering and bargain hunting

CPO futures rebound on short covering and bargain hunting
Business & Markets 2013
Written by Bernama
Wednesday, 17 July 2013 19:29

KUALA LUMPUR (July 17): The crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives rebounded to close firmer on the back of short covering and bargain hunting after the recent sharp decline in prices, a dealer said.

Phillip Futures Sdn Bhd derivative product specialist, David Ng, said firmness on the Chicago Board of Trade soyoil futures trade today was also seen supporting palm oil prices.

However, the fundamentals remain weak as exports decline and Malaysia's output is expected to rise from this month onwards, and hence gains may not be sustained.

"On the charts, the October CPO again rebounded from the support of RM2,225 per tonne level.

"However, only a sustained move above RM2,280 will confirm strength, and push the price towards the RM2,320-RM2,350 levels," Ng told Bernama.

He noted that only a decline below RM2,225 per tonne would extend the weakness towards the RM2,200 per tonne level.

Spot month August 2013 increased RM18 to RM2,277 per tonne, September 2013
rose RM21 to RM2,2660 per tonne, October 2013 perked RM22 to RM2,250 per tonne
and November 2013 improved RM21 to RM2,245 per tonne.

Turnover expanded to 40,220 lots from 31,639 lots yesterday, while open interest advanced to 224,560 contracts from 214,060 contracts previously.

On the physical market, August South rose RM10 to RM2,310 a tonne.