CPO futures expected to trade lower next week
27/05/2023 (The Edge Malaysia), Kuala Lumpur - Crude palm oil (CPO) futures on the Bursa Malaysia Derivatives market are expected to trade lower on higher output in the coming weeks.
Palm oil trader David Ng said CPO output is expected to increase in line with seasonal patterns, which may weigh down sentiment of market players to buy the commodity.
“CPO production usually increases from April onwards, hence we expect the market to trade between RM3,300 and RM3,600,” he told Bernama.
For the week just ended, CPO futures were traded mostly higher on a weaker ringgit, expectations of lower production, as well as expectations of stronger exports, which lifted market sentiments.
On a weekly basis, the June 2023 contract was RM135 lower at RM3,590 a tonne, while July 2023 added RM13 to RM3,602 a tonne, and August 2023 increased RM78 to RM3,559 a tonne.
The September 2023 contract rose RM99 to RM3,554 a tonne, October 2023 expanded RM101 to RM3,557 a tonne, and November 2023 was RM102 higher at RM3,560 a tonne.
Total weekly volume fell to 302,642 lots from 352,098 lots, while open interest was higher at 259,646 contracts from 201,387 contracts last Friday.
The physical CPO price for June South was down by RM130 to RM3,620 a tonne.