CPO futures to trade higher next week


  • Commodities
  • Saturday, 20 Jun 2020

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trade higher next week, in sync with increased export data, a projected stronger Dalian Commodity Exchange performance, recovery in equity markets, and sustained gains in Brent crude oil price.

Palm oil trader David Ng said demand would come from major buyers like India and China, amidst imposition of Malaysia’s zero tax charges.

"India and China have stepped up their purchases of palm oil, which will likely lower the overall stock level in Malaysia,” he told Bernama.

Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said CPO futures rose rapidly and sharply toward closing on Friday, as market talks had indicated that Malaysia's export for June 1-20 period was expected to rise 55-57 per cent compared to the same period in May.

"As such, Malaysia's June export is poised for a fourth successive monthly growth.

"Benchmark September 2020 closed at RM2,475 a tonne, the highest in four months,” he told Bernama.

However, rising production data from the Malaysian Palm Oil Association and Southern Peninsular Palm Oil Millers Association and fears of a COVID-19 resurgence may weigh on prices.

Additionally, market participants will also be keenly watching the Malaysian Palm Oil Council's (MPOC) ‘Pointers on Price Trends’ online event on June 22-28, 2020, for price and production outlook.

For the week just-ended, the market was traded mostly higher as economies start reopening globally.

On a Friday-to-Friday basis, the CPO futures contract for July 2020 improved RM24 to RM2,454 per tonne, while August 2020 and September 2020 increased RM29 each to RM2,400 per tonne and RM2,367 per tonne, respectively.

Weekly turnover shed to 256,328 lots from last Friday’s 245,808 lots while open interest decreased to 227,871 contracts from 252,401 contracts.

On the physical market, July South, which is the new contract month, stood at RM2,530 per tonne. - Bernama

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CPO futures , exports , David Ng , Sathia Varqa , COVID-19 , MPOC

   

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