CPO futures seen to continue trading with downside bias next week
22/10/2022 (The Star Online), Kuala Lumpur - Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives are expected to trade with a downward bias next week due to the expectation of higher stocks in the country as well as weaker demand, said palm oil trader David Ng.
He forecast CPO prices would trade between RM3,800 and RM4,250 per tonne.
"The country’s higher stockpile and weaker demand will likely pressure the commodity’s prices.
"We expect prices to show a downward bias next week owing to profit-taking activities amid the recent rally,” he told Bernama.
Meanwhile, Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said next week, the CPO market will have a short trading week with a public holiday on Monday (for Deepavali), and key buyer India will also be on holiday for most of the week.
"Palm oil focus next week would be on Indonesia’s palm oil export levy waiver -- whether it will be extended beyond October.
"The market will also look for Malaysia's palm oil production performance for the Oct 1-20 period.
"We expect palm oil to stay in a wider range of RM3,840-RM4,230 per tonne,” he said.
UOB Kay Hian and Malaysian Palm Oil Association data are expected to be released next week.
Anilkumar said CPO futures closed sharply higher on a week-on-week basis following the bullish momentum in soybean oil markets and expectation of a reduction in production due to rain.
"Additional support came amidst the uncertainty over the Russia-Ukraine grain corridor extension, which could threaten the Ukrainian sunflower oil export supplies from the usual seaports,” he said.
On a weekly basis, CPO futures for spot month November 2022 added RM193 to RM3,979 a tonne, December 2022 rose RM219 to RM4,052 a tonne, January 2023 was RM235 higher at RM4,101 a tonne, February 2023 surged RM231 to RM4,128 a tonne, March 2023 jumped RM210 to RM4,135 a tonne, and April 2023 improved RM185 to RM4,124 a tonne.
Total weekly volume increased to 363,645 lots from 271,207 lots in the previous week, while open interest narrowed to 204,192 contracts from 206,691 contracts at the end of last week.
Physical CPO price for October South climbed RM270 to RM4,020 per tonne. - Bernama