The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade in a cautious tone next week ahead of key crop reports to be released in the same week, a dealer said.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said next week is very important where the Malaysian Palm Oil Board (MPOB) report would release its data on June 10.
“The destinations were mostly quiet this week apart from China and next week, the palm oil prices will have to be offered competitively to attract fresh buying.
“We estimate CPO futures to trade in a wider range of RM6,200 to RM6,700 per tonne next week, depending upon the soybean oil market performance,” he told Bernama.
He said the CPO futures closed the last day of the week lower on a cautious note ahead of the Monday public holiday.
“Palm oil market has been experiencing a turbulent time amidst Indonesian palm oil export policy flip flops, the slower than required export permit allocations, Malaysian palm oil production woes due to the absence of foreign labour issue and the prolonged Russia Ukraine,” he added.
Meanwhile, palm oil trader David Ng said CPO futures is forecasted to trade with an upward bias as stronger crude oil prices and strong fundamentals to keep prices supported.
“I believe the strong fundamentals next week mainly on the expectation of a weaker output and lower stocks.
“We expect the price to trade between RM6,200 and RM6,700 next week,” he said.
For the week just ended, the Malaysian CPO futures ended mostly lower as Indonesia resumed palm oil exports, which put pressure on Malaysia’s palm oil performance.
On a Friday-to-Friday basis, spot month June 2022 fell RM175 to RM6,704 a tonne, July 2022 decreased RM17 to RM6,675 a tonne, August 2022 increased RM100 to RM6,453 a tonne, September 2022 gained RM108 to RM6,257 a tonne, October 2022 added RM103 to RM6,146 a tonne and November 2022 was up by RM99 to RM6,098 a tonne.
Weekly volume declined 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 a tonne.
Source: The Star