KUALA LUMPUR, June 17 (Bernama) - The local crude palm oil (CPO) futures market is expected to trend lower this week on profit-taking activities.

Palm oil trader David Ng expects profit-taking to happen after the recent rally due to the bullish momentum on the Chicago Board of Trade's (CBOT) soybean oil market and the weaker local currency.

"As such, the price movement this week is expected to hover between RM3,550 and RM3,800 per tonne," he told Bernama.

For the week just ended, CPO futures traded higher, tracking soybean oil futures on the CBOT, the lower ringgit versus the greenback as well ongoing concerns over decreased production due to El Nino.

On a weekly basis, the July 2023 contract added RM377 to RM3,785 per tonne, August 2023 rose RM399 to RM3,766 and September 2023 advanced RM377 to RM3,743.

The October 2023 note expanded RM359 to RM3,738 per tonne while November 2023 garnered RM346 to RM3,742 per tonne and December 2023 gained RM368 to RM3,380 per tonne.

The total weekly volume surged to 342,040 lots from 235,769 lots while open interest advanced to 303,471 contracts from 265,572 contracts on Friday last week.

The physical CPO price for June South was higher by RM350 to RM3,800 a tonne.

Meanwhile, the Kuala Lumpur rubber market is expected to trade range-bound with a slight upside bias this week due to the expectation of lower production.

Malaysian Rubber Glove Manufacturers Association's immediate past president Denis Low said there would be the usual stock replenishment activities while interest in more rubber stocking purchases would depend on weather conditions.

"There have been sporadic rainfalls reported in some rubber-producing regions and this will reduce productivity and production," he told Bernama.

Meanwhile, another dealer said prices would continue to track the performance of regional rubber futures markets, the ringgit's strength against the US dollar, and benchmark crude oil prices amid raised expectations for more stimulus measures from China to aid economic recovery.

"Markets will be keeping an eye out for a potential cut in China's benchmark loan prime rate this week and further cues on US monetary policy," he said.

On a weekly basis, the Malaysian Rubber Board's (MRB) reference physical price for Standard Malaysian Rubber 20 (SMR 20) increased by five sen to 615 sen on Friday from 610 sen a kilogramme (kg) a week earlier.

Latex-in-bulk fell 6.5 sen to 499 sen a kg from 505.5 sen a kg previously.

At 5 pm on Friday, the MRB's reference price for physical rubber SMR 20 stood at 616.5 sen a kg, while latex-in-bulk was at 498.5 sen a kg.

 - BERNAMA