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CPO prices off morning low, UOB Kay Hian bearish
by hlk Wed 29 Jun 2011, 14:20
KUALA LUMPUR: Crude palm oil prices (CPO) for the third-month delivery fell to an intra-morning low of RM3,087 per tonne on Wednesday, June 29.
However, by 11.15am, it managed to recover and rose RM34 to RM3,097 per tonne.
UOB Kay Hian Malaysia Research is maintaining its Underweight and it expects CPO price to trend downwards due to the bearish outlook on CPO price.
“However, we prefer pure refiners which will benefit from the strong palm oil production and decreasing CPO price,” it said in a research note on Wednesday.
The research house said CPO price hit an eight-month low at RM3,042 a tonne (down 17.8% year-to-date, down 19.5% from the peak) on Monday, June 27.
UOB Kay Hian Malaysia Research said the following bearish factors which would set the CPO price trend were the weakness in crude oil price due to demand concern; uncertain outlook regarding the potential US withdrawal of tax credit to ethanol producers while high palm oil inventory in Malaysia is expected to continue.
However, by 11.15am, it managed to recover and rose RM34 to RM3,097 per tonne.
UOB Kay Hian Malaysia Research is maintaining its Underweight and it expects CPO price to trend downwards due to the bearish outlook on CPO price.
“However, we prefer pure refiners which will benefit from the strong palm oil production and decreasing CPO price,” it said in a research note on Wednesday.
The research house said CPO price hit an eight-month low at RM3,042 a tonne (down 17.8% year-to-date, down 19.5% from the peak) on Monday, June 27.
UOB Kay Hian Malaysia Research said the following bearish factors which would set the CPO price trend were the weakness in crude oil price due to demand concern; uncertain outlook regarding the potential US withdrawal of tax credit to ethanol producers while high palm oil inventory in Malaysia is expected to continue.
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