CPO futures to trade with upward bias next week

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KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade with upward bias next week, tracking the strong sentiment in the Chicago bean oil market as well as the prospect of better performance.

Palm oil trader David Ng said prices are expected to trade within a range as the market awaits key crop reports.

“We estimate the price to trade within a range of RM3,700 and RM3,900 per tonne,” he told Bernama.

Meanwhile, Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said CPO futures traded higher for the fourth successive day boosted by a lower than expected rise in June production but a solid gain in exports.

“Malaysian Palm Oil Association data due next week will offer a clearer indication on the state of June performance. For now, the CPO market is pricing in sub-optimal output,” he said.

Hence, he added that for next week CPO futures still has the chance to go higher if June S&D estimate shows a slower rise in output and declining stocks.

For the week just ended, the market closed mostly higher, tracking the overnight gains in soybean oil futures on the Chicago Board of Trade and prospect of higher exports after India reduced import duty on CPO to 10 per cent and removed the restriction on RBD palm olein.

On a weekly basis, the July 2021 contract gained RM196 to RM3,898 per tonne, August 2021 recovered RM263 to RM3,864 per tonne, September 2021 earned RM269 to RM3,789 per tonne and October 2021 firmed RM238 to RM3,713 per tonne.

Weekly volume was reduced to 312,143 lots from 381,462 lots in the previous trading week, while open interest declined to 233,852 contracts versus 234,760 contracts previously.

The physical CPO price for July South advanced RM230 to RM3,980 per tonne. – Bernama



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