That, in a word, may best describe the present mood in the Kuala Lumpur CPO 
futures market.
Last week, for the first time after 11 consecutive weeks of week-on-week 
ascents up the price chart, this market ended the week lower than in the week 
that preceded it.
This market’s benchmark third month forward contract started its RM1,830 to 
RM2,798 bull run in the week ended February 27 2009. closing the previous week 
at RM2,685 for an astonishing 53 per cent gain in under three months. The 
benchmark July 2009 contract, however, settled last week at RM2,663 a tonne, 
down RM22 or 0.83 per cent over the week.
The question now is: Is it a pause for breath? Or is it the start of a 
serious technical pullback? 
Over the past month market players (the smart money?) have been liquidating 
their positions in numbers. This was evidenced by the huge contraction in the 
total open interest position - from 91,156 open contracts on April 22 when the 
price was RM2,475 to 75,553 open contracts last Thursday when the price was 
RM2,663. The contraction of 2,179 open contracts last week was significant in 
that it was evidence of liquidation - and a faltering in investor confidence as 
cracks appeared in the technical picture.
Some market players have expressed disappointment with the Malaysian Palm Oil 
Board (MPOB) end-April 2009 1.29-million-tonne figure stock figure, which was 
higher than market expectation of 1.2 million tonnes. 
Conclusion: To be sure, though the technical indicators suggest this market 
is ripe for a fall, no sign has appeared that the back of this bull is broken - 
yet.
The RM2,595 immediate support level, if decisively broken through on the 
downside, could be the first signal that the bulls are finally heading for the 
hills, at least in the short-term future.


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