CPO futures to see volatile trading next week, eyes on MPOB data

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives may see volatile trading next week, ahead of the release of production, stocks and exports data.

Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said markets will closely monitor the Malaysian Palm Oil Board's (MPOB) data, which is due on Monday.

In addition, investors are also awaiting April 1-10 projections by cargo surveyors, which are likely to be released next week.

"Focus will be on March production. However, prices are likely to be firmer but volatile," he told Bernama, today.

Earlier this week, Sathia said global demand and export for palm oil products will see strong recovery from April to June 2021, mainly from India and China, which are severely understocked at the moment.

He said China's stocks have been in deficit for many months with the latest data showing stocks being in deficit by 27 per cent.

Meanwhile, palm oil trader David Ng expects CPO prices to trade within a negative bias of between RM3,650 and RM3,850 per tonne.

During the week, the CPO market was mostly higher with stronger exports estimation for March by some research houses.

CGS-CIMB expects palm oil exports to grow 25 per cent month-on-month in March 2021, likely due to stronger demand from India as a result of restocking activities and attractive discount against other competing edible oils ahead of Ramadan.

Data by the Southern Peninsula Palm Oil Millers' Association (SPPOMA) showed that output had dropped six per cent for the April 1- 5 period versus the March 1-5 period.

On a Friday-to-Friday basis, CPO futures contracts were mostly higher, with April 2021 surging RM133 to RM4,280 per tonne; May 2021 increased RM108 to RM4,055 per tonne; June 2021 rose RM30 to RM3,767 per tonne; while July 2021 fell RM19 to RM3,554 per tonne.

Weekly volume fell to 276,736 lots from 323,794 lots the previous week, while open interest increased to 260,493 contracts from 232,463 contracts a week earlier.

The physical CPO price for April South jumped RM140 to RM4,300 per tonne from RM4,160 per tonne on Friday last week. - Bernama