CPO futures should see cautious trading next week

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade on a cautious tone next week ahead of the release of major harvest reports the same week, a dealer said.

Anilkumar Bagani, head of commodity research at Mumbai-based Sunvin Group, said next week was very important as the Malaysian Palm Oil Board (MPOB) report would release its data on June 10.

“Destinations were mostly quiet this week with the exception of China and next week palm oil prices will need to be offered competitively to attract new purchases.

“We estimate that CPO futures will trade in a wider range of RM6,200 to RM6,700 per tonne next week, depending on the performance of the soybean oil market,” he said. told Bernama.

He said CPO futures closed the last day of the week lower on a cautious note ahead of the Monday bank holiday.

“The palm oil market has been through a turbulent period amid flip-flops in Indonesian palm oil export policy, slower than required export permit allocations, production issues Malaysian palm oil companies due to lack of foreign labor issue and protracted Ukrainian Russia,” he added.

Meanwhile, palm oil trader David Ng said CPO futures are likely to trade with an upward bias as crude oil prices are stronger and strong fundamentals to keep prices supported.

“I believe in strong fundamentals next week mainly on the expectation of weaker production and lower inventories.

“We expect the price to trade between RM6,200 and RM6,700 next week,” he said.

For the past week, Malaysian palm oil futures ended mostly lower as Indonesia resumed palm oil exports, putting pressure on the performance of Malaysian palm oil.

From Friday to Friday, June 2022 spot month fell RM175 to RM6,704 per ton, July 2022 fell RM17 to RM6,675 per ton, Aug 2022 rose RM100 to RM6,453 per ton ton, Sep 2022 gained RM108 to RM6 257 per ton, Oct 2022 added RM103 to RM6,146 per ton and Nov 2022 increased by RM99 to RM6,098 per ton.

Weekly volume fell to 320,844 lots from 325,550 lots last week, while open interest improved to 259,763 contracts from 204,474 contracts previously.

The physical CPO price for June South fell by RM150 to RM6,800 per ton. – Bernama

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