CPO futures to see volatile trading next week


KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives may see volatile trading with a downside bias next week, ahead of the release of production, stocks and exports data.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said trading was also positive ahead of Malaysian Palm Oil Association (MPOA) production, supply and demand data for May, expected to be released next week.

“Markets will closely monitor the Malaysian Palm Oil Board (MPOB) data due on June 10.

“So, the CPO market will trade according to supply and demand estimates and May 1-31 export data, which is expected to be bearish,” he told Bernama.

He added that market participants were also waiting to hear confirmation of Indonesia’s June export tax which was not forthcoming today but would be announced on Monday.

According to Intertek Testing Services data, exports for the May 1-25 period inched up 0.25 per cent to 1.105 million tonnes from 1.102 million tonnes in the same period in April 2021.

Cargo surveyor Amspec Malaysia, meanwhile, stated that exports in the May 1-25 period ticked up 0.33 per cent to 1.107 million tonnes from 1.103 million tonnes in the same period last month.

For the week just ended, Malaysia’s CPO futures market was traded mixed in line with weakness in soybean oil performance on the US Chicago Board of Trade, as well as modest recovery in palm olein performance on China’s Dalian Commodity Exchange and bargain buying.

On a weekly basis, the CPO futures contracts were mixed. June 2021 fell RM90 to RM4,301 per tonne and July 2021 eased RM9 to RM4,160 per tonne, but August 2021 added RM19 to RM4,010 per tonne and September 2021 was RM40 higher at RM3,894 per tonne.

Weekly volume shrank to 284,060 lots from 368,985 lots in the previous trading week, while open interest dropped to 243,856 contracts from 263,477 contracts a week earlier.

The physical CPO price for May South slipped RM90 to RM4,360 per tonne. – Bernama

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