KUALA LUMPUR: Credit Suisse Research said palm oil spot prices have fallen 14%, from 2011 peak of RM3,910 to RM3,375, and is trading at a four-month low.
It said on Wednesday, March 16 that it believes palm oil prices have peaked and will weaken especially in 2H11 for the following reasons: (1) La Nina is fading; (2) record-high net long speculative positions in soy and corn are vulnerable to profit taking; and (3) Palm oil supply could surprise on the upside in 2H11.
Year-to-date, palm oil spot prices have averaged RM3,708 per tonne. 'We have assumed a 2011 palm oil price average of RM2,950/tonne,' it said.
It said investors should watch out for the US Planting Intentions Report on March 31.
'Among our coverage, companies which are most vulnerable to a fall in palm oil prices are Genting PLANTATION []s, KLK, Sime and IndoFood Agri. We maintain our UNDERPERFORM ratings on IOI and Sime. Wilmar is the only stock with an OUTPERFORM rating in the palm oil space,' it said.
It said on Wednesday, March 16 that it believes palm oil prices have peaked and will weaken especially in 2H11 for the following reasons: (1) La Nina is fading; (2) record-high net long speculative positions in soy and corn are vulnerable to profit taking; and (3) Palm oil supply could surprise on the upside in 2H11.
Year-to-date, palm oil spot prices have averaged RM3,708 per tonne. 'We have assumed a 2011 palm oil price average of RM2,950/tonne,' it said.
It said investors should watch out for the US Planting Intentions Report on March 31.
'Among our coverage, companies which are most vulnerable to a fall in palm oil prices are Genting PLANTATION []s, KLK, Sime and IndoFood Agri. We maintain our UNDERPERFORM ratings on IOI and Sime. Wilmar is the only stock with an OUTPERFORM rating in the palm oil space,' it said.
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