KUALA LUMPUR, June 26 – Bursa Malaysia’s Crude Palm Oil (CPO) Derivatives Futures Contract is expected to trade in range-bound mode next week as the market lacks movement catalysts, said a broker.
Jim Teh, senior palm oil trader at Interband Group of Companies, said the market projection was made on the basis of the calm market and the lack of a major festival in the coming weeks.
He told Bernama that the futures contract is expected to trade between RM3,200 and RM3,300 per tonne.
Palm oil trader David Ng also expects CPO futures to trade within a range but with a negative bias, given the prospect of higher production which could raise the overall level of inventories. in the country.
“We estimate the price to be negotiated within a range of RM 3,400 per tonne and RM 3,650 per tonne,” he said.
Meanwhile, MIDF Research predicts that the price of CPO will decline in the second half of the year as production is expected to recover due to better weather conditions, resulting in increased inventories.
Higher soybean production would likely have a negative impact on the CPO price, noting that the United States Department of Agriculture (USDA) has increased its forecast for Brazilian soybean production from one million tonnes to 137 million tonnes. , the research house said.
“High soybean stocks will eventually lead to increased soybean oil supply (SBO). The price of CPO is strongly correlated with SBO, as the two products are commonly used as substitutes for each other in the food industry, ”the company said.
For the week just ended, the market closed mostly lower, following soybean oil weakness in the Chicago Board of Trade and the feeling of declining exports in the coming months.
On a weekly basis, the July 2021 contract earned RM109 at RM3702 per ton, August 2021 earned RM98 at RM3601 per ton, September 2021 earned RM96 at RM3,520 per ton and October 2021 a confirmed RM92 at RM 3,475 per ton
Weekly volume was reduced to 381,462 lots from 484,666 lots the previous trading week, while open interest fell to 234,760 contracts from 270,605 contracts previously.
The physical CPO price for July South advanced from RM50 to RM3750 per tonne. Bernama