Cautious trade expected for CPO futures next week

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to see cautious trading next week amid volatility in the market due to Russia’s invasion of Ukraine, said a dealer.

Interband Group of Companies senior palm oil trader Jim Teh said CPO was expected to trade with a downward bias next week, continuing the weakness recorded on Friday.

"Market players are adopting a wait-and-see stance on the development in Ukraine,” he told Bernama.

On Friday, CPO closed significantly lower on profit-taking activities. CPO price surpassed RM7,000 a tonne for the first time on Thursday following news that Russia had launched an invasion of Ukraine.

Crude oil prices also topped US$100 a barrel this week, for the first time since 2014.

For the week just ended, CPO futures were mostly higher, driven by the bullish momentum of soybean oil on the US Chicago Board of Trade as well as news of India’s CPO import duty cut to 5.0 per cent from 7.5 per cent.

On a Friday-to-Friday basis, March 2022 jumped RM690 to RM6,732 a tonne, April 2022 strengthened RM551 to RM6,321 a tonne, and May 2022 advanced RM424 to RM5,984 a tonne.

Meanwhile, June 2022 rose RM315 to RM5,690 a tonne, July 2022 gained RM267 to RM5,476 a tonne, and August 2022 added RM237 to RM5,310 a tonne.

Weekly volume increased to 361,846 lots from 361,780 lots last week, while open interest grew to 317,771 contracts from 264,610 contracts previously.

The physical CPO price for March South stood at RM6,800 a tonne. - Bernama