The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trend lower next week on profit-taking activities.
Interband Group of Companies senior palm oil trader Jim Teh said prices were expected to hover between RM5,500 and RM6,000 per tonne, influenced by a weaker local currency, inflation in the United States, and lockdown in Shanghai.
“For the futures market (papers trading), traders will be hoping that prices go up on speculative play,” he told Bernama.
Meanwhile, palm oil trader David Ng said the market would start to attract bargain-hunting activities with an upward bias following the recent steep sell-down.
The Malaysian Palm Oil Board (MPOB) data released on Friday showed Malaysia’s CPO stocks falling 7.03 per cent to 829,855 tonnes in May 2022 from the 892,596 tonnes recorded in the preceding month.
The agency said palm oil exports improved 26.67 per cent to 1.36 million tonnes in May from 1.07 million tonnes in April, while palm kernel oil exports rose 8.95 per cent month-on-month to 81,135 tonnes from 74,472 tonnes previously.
For the week just ended, the Malaysian CPO futures were lower due to the weakness in the soybean oil market on the Dalian Commodity Exchange and the lifting of Indonesia’s palm oil export ban, which continued to put pressure on Malaysia’s CPO demand and prices.
On a Friday-to-Friday basis, spot month June 2022 slid RM423 to RM6,281 a tonne, July 2022 narrowed RM532 to RM6,143 a tonne, August 2022 decreased RM533 to RM5,920 a tonne, September 2022 shrank RM491 to RM5,766 a tonne, October 2022 shed RM496 to RM5,677 a tonne, and November 2022 was down by RM433 to RM5,665 a tonne.
Total volume contracted to 258,636 lots during the holiday-shortened week from 320,844 lots in the previous week, while open interest dropped to 221,157 contracts from 259,763 contracts. The market was closed on Monday (June 6) in conjunction with the Yang di-Pertuan Agong’s official birthday.
The physical CPO price for June South inched down RM150 at RM6,550 a tonne.
Source: The Straits Times