09/01/2012 (Bernama) - Crude palm oil futures contracts are likely to trade higher next week in anticipation of a favourable data from the Malaysian Palm Oil Board (MPOB) which is due next week, a dealer said.

She expects the futures contracts to extend the gains recorded on Friday.

Meanwhile Jim Teh, a senior trader with Interband Group of Companies expects the futures contracts to be traded between RM3,100 and RM3,150 per tonne.

Teh said the market had staged a bullish performance during the week just ended, breaching the RM3,200-mark, surpassing his expectations.

"The market began the year with an excellent performance. The futures contracts are likely to be traded within the range of RM3,100 and RM3,150 per tonne," he told Bernama.

"Investors would not enter the market if the prices are too high," Teh added.

Chris Oh, Head of Research/Strategist at UBS Investment Research expects the CPO prices to recover this year on the back of higher demand from China, India and Indonesia.

Oh said another factor that would boost CPO prices was the tightening oilseed supply in 2012 as a result of slow plantings in the United States and weather risk.

OCBC Bank in its Commodities Outlook for 2012 said the weather would remain the biggest wildcard in determining palm oil supply in Indonesia and Malaysia for this year.

"The current La Nina episode is estimated to last till early 2012 and may continue to affect harvesting efforts," OCBC said.

The bank expects a production recovery in 2012 based on two reasons with one being that the 2012's La Nina episode will be less severe and another that production tended to rebound in double digit percentage point after the monsoon.

Heavy rains tend to spur pollination in oil palm trees, it explained.

For the week just ended, January 2012 added RM23 to RM3,198 a tonne, February 2012 added RM41 to RM3,216, March 2012 rose RM36 to RM3,211 a tonne and April 2012 increased RM33 to RM3,203 a tonne.

Turnover for the week increased to 74,677 lots from 68,391 lots recorded the previous week.

Open position rose to 114,558 contracts on Friday from 113,036 contracts the previous Friday.