Profit Taking Ahead of Long Holiday Potential to Press Malaysian CPO Price
By : Abraham Sihombing And Aldo Bella Putra | Wednesday, August 30 2017 - 19:00 IWST
INDUSTRY.co.id - Jakarta - The price of crude palm oil (CPO) Malaysia opened slightly higher than the previous trading session, at 2,724 ringgit per ton in trading on Wednesday (30/08/2017). However, the price of CPO has the potential to decline because it is still burdened by the sentiment of falling vegetable oil prices in the global market.
"In addition, the emergence of profit taking actions conducted by investors ahead of the long holiday Eid al-Adha celebrations starting tomorrow is also expected to again push the CPO price decline. However, the decline is predicted to be limited because Malaysian ringgit rates depreciate, "said Faisyal, an analyst of commodity products of PT Monex Investindo, in Jakarta, Wednesday (30/08/2017).
The possibility could happen after the CPO traders in Kuala Lumpur said profit taking usually occurs before the holidays, especially when the Dalian Commodity Exchange and soybean oil prices are decreasing.
As is known, Malaysia Derivatives Exchange will stop its operations on Thursday and Friday along with Idul Adha holiday that falls on September 1, 2017.
Faisyal said Malaysia's CPO price is expected to fall again and test its support point at 2,675 ringgit per ton. If the CPO price drops through that position, then it is possible to experience further decline to 2,650 ringgit per ton.
"However, if the price of CPO can continue to rise and penetrate the resistance point at 2,735 ringgit per ton, it will push the next up to penetrate the next resistance point at 2,770 ringgit per ton," Faisyal said.
Based on data available, Faisyal said, the price of soybean oil contract for delivery in October 2017 at Chicago Board of Trader (CBOT) fell 1% on Seasa (29/08/2017). Meanwhile, the price of soybean oil contract for January 2018 shipment in Dalian Commodity Exchange fell 1%.
Meanwhile, Faisyal said, the Malaysian ringgit rate until 10:58 pm was at position 4.2680 per US dollar, or weakened 0.1%. The depreciation of the Malaysian ringgit rates makes Malaysian CPO prices cheaper for other currency owners. (Abraham Sihombing)