KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives would likely experience a technical correction next week following high inventory data released by the Malaysian Palm Oil Board (MPOB).
Interband Group of Companies senior palm oil trader Jim Teh said stock has increased in Malaysia and Indonesia, with plenty of palm oil products in the market especially for June and July.
"Hence, the futures contract would likely trade between RM3,300 and RM3,400 per tonne,” he told Bernama.
Yesterday, the MPOB data indicated that the CPO stockpile continued to rise in May 2021, growing 7.15 per cent to 841,464 tonnes from 785,308 tonnes the month before.
Palm oil exports fell 6.01 per cent month-on-month to 1.26 million tonnes in May from 1.35 million tonnes, and palm kernel oil exports shrank 26.12 per cent month-on-month to 71,330 tonnes from 96,546 tonnes in the preceding month.
However, palm oil trader David Ng projected the prices to find some strength next week, given the recent weakness which may attract some buying interest from traders.
Similarly, Singapore-based Palm Oil Analytics’ owner and co-founder Dr Sathia Varqa said the CPO market should see a rebound after the sharp fall this week, buoyed by better expectations for the June 1 to 15 export data.
According to an independent inspection company AmSpec Agri Malaysia, exports of local palm oil products from June 1 to 10 fell 14.3 per cent to 402,520 tonnes from the same period in May.
For the week just ended, the market closed lower due to the continued concern over higher production and output which weighed on the prices.
On a weekly basis, June 2021 fell RM371 to RM3,859 per tonne, July 2021 shrank RM487 to RM3,714 per tonne, August 2021 plunged RM466 to RM3,663 per tonne and September 2021 dipped RM439 to RM3,625 per tonne.
Weekly volume decreased to 300,823 lots from 386,895 lots in the previous trading week, while open interest increased to 250,420 contracts versus 230,652 contracts previously.
The physical CPO price for June South slipped RM100 to RM4,050 per tonne.
The domestic market was closed on Monday in conjunction with the official birthday of the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah. - Bernama