KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to experience a technical correction ahead of data to be released by the Malaysian Palm Oil Board (MPOB) next week.
Interband Group of Companies senior palm oil trader Jim Teh said the MPOB is expected to release production, stocks as well as export data for June with expectation of higher stock on Monday.
"I expect stock will rise due to good weather. I assume there will be demand but a little bit slow.
"Hence, the futures contract will likely trade between RM3,300 and RM3,400 per tonne,” he told Bernama.
Meanwhile, palm oil trader David Ng forecasts CPO futures to trade with a slight downward bias.
However, compared to Teh, Ng was slightly more bullish in his CPO price outlook, projecting the commodity to trade between RM3,700 and RM3,950 per tonne in the short term.
Earlier today, CGS-CIMB Futures Sdn Bhd has projected CPO price to remain firm at RM3,400 to RM4,000 per tonne in July 2021 amid low global edible oil inventories and workers shortage in Malaysia.
The futures trading firm expects the CPO supply to recover in the coming months but at a slower rate due to labour shortage woes.
For the week just ended, the market closed mostly lower, tracking the poor performance in soybean oil futures on the Chicago Board of Trade and concerns over potentially higher output in the upcoming weeks.
On a weekly basis, the July 2021 contract gained RM122 to RM4,020 per tonne, August 2021 recovered RM101 to RM3,940 per tonne, September 2021 earned RM123 to RM3,892 per tonne and October 2021 firmed RM114 to RM3,812 per tonne.
Weekly volume was marginally up to 312,159 lots from 312,143 lots in the previous trading week, while open interest rose to 247,219 contracts versus 233,852 contracts previously.
The physical CPO price for July South advanced RM70 to RM3,050 per tonne. - Bernama