CPO futures may see profit-trading in quiet trading next week

KUALA LUMPUR, April 30 (Bernama): The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to see quiet trading next week ahead of the Labour Day and Hari Raya Aidilfitri holidays, said Jim Teh, senior palm oil trader of Interband Group of Companies.

He said the market might also see profit-taking activities after the long break with prices expected to hover between RM5,500 to RM6,500 a tonne.

"The market may see profit-taking activities because of the shortened trading week.

"Furthermore, many local and international palm oil traders are likely away on holidays," he told Bernama.

Palm oil trader David Ng said he is expecting the market to trade sideways next week due to the long holidays.

"The market is well supported with the news of the Indonesia export ban and prices are expected to be between RM6,700 and RM7,300,” he said.

Palm Oil Analytics owner and co-founder Sathia Varqa said the short two-day trading next week could see some profit-booking after record high prices with hefty gains.

On Friday, CPO futures closed at an all-time high of RM7,105 a tonne, rising 2.76 per cent as it mirrored the solid gains in soybean oil prices on the US Chicago Board of Trade (CBOT).

"Tight global vegetable oil supply outlook after Indonesia completely pulled out of the market and the Ukraine-Russia war, plus a flash of CBOT sale was sufficient to fuel record high prices on soybean and palm oil ahead of the long weekend in Malaysia, Indonesia, China, and Japan,” he said.

Bursa Malaysia Bhd and its subsidiaries announced that the exchange will be closed on May 2, 2022 (Monday) in conjunction with the Labour Day replacement holiday and closed for another two days on May 3 and 4 (Tuesday and Wednesday) for Hari Raya Aidilfitri.

Bursa Malaysia and its subsidiaries will resume operations on May 5, 2022 (Thursday).

For the week just ended, CPO futures were traded mostly higher in tandem with the overnight gains in soybean oil prices on the CBOT, Indonesia's palm oil export ban continued to lift market sentiment, and expectation of a weaker output in coming weeks.

On a Friday-to-Friday basis, May 2022 gained RM812 to RM7,683 per tonne, June 2022 rose RM972 to RM7,597 per tonne, July 2022 increased RM749 to RM7,104 per tonne, August 2022 went up RM592 to RM6,754 per tonne, September 2022 was RM474 higher at RM6,519 per tonne, and October 2022 surged RM425 to RM6,391 per tonne.

Weekly volume advanced to 376,616 lots from 204,757 lots last week, while open interest widened to 206,333 contracts from 203,392 contracts previously.

The physical CPO price for May South jumped RM850 to RM7,750 a tonne. - Bernama