CPO futures likely to undergo technical correction next week

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to experience a technical correction next week following the higher price movement this week, said Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa.

Yesterday, the CPO futures skyrocketed and hitting a fresh all-time high at RM5,322 a tonne for the April benchmark contract.

Sathia also expects profit-taking activities as well as adjustment to the soybean oil performance on the US Chicago Board of Trade (CBOT).

"We foresee cautious trading ahead of the release of Malaysian Palm Oil Association (MPOA) palm oil industry performance data for Jan 1-20 production coupled with Jan 1-25 export data,” he told Bernama.

For the week just ended, Malaysian CPO futures finished higher on concerns of weaker output as well as the Indonesian move to limit palm oil exports in their country.

On a Friday-to-Friday basis, January 2022 soared by RM204 to RM5,504 a tonne, February 2022 gained RM177 to RM5,453 a tonne, March 2022 added RM199 to RM5,322 a tonne and April 2022 improved by RM223 to RM5,179 a tonne.

Meanwhile, May 2022 rose RM260 to RM5,048 a tonne and June 2022 widened by RM269 to RM4,915 a tonne.

Weekly volume edged up to 296,878 lots from 299,760 lots last week, while open interest dipped to 267,885 contracts from 268,508 contracts previously.

The physical CPO price for January South jumped by RM150 to RM5,500 a tonne. - Bernama