CPO futures likely to see volatile trading next week

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trade in a volatile mode next week as investors take directions from the World Agricultural Supply and Demand Estimates (WASDE) and Malaysian Palm Oil Board (MPOB) reports.

Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said the WASDE report was published on Friday but since the market has already closed, the impact on CPO futures would be carried into next week.

Meanwhile, the MPOB report will be published on April 11, 2022.

"The focus will also on production and export performance for the first half of April which will set tone for the full April month,” he told Bernama.

Besides, he said the benchmark month has a key resistance of RM6,000 a tonne on a closing basis.

"Unless it gets passed, we may see one more downside leg to unfold in this market up to RM5,400 a tonne to RM5,600 a tonne,” he said.

Additionally, Anilkumar said other palm oil buying destinations, besides India, are quiet due to unfavourable import margins.

However, he said things might quickly change if competing oils and energy prices strengthen further.

For the week just ended, CPO futures were traded mostly higher, tracking the firmer Chicago Board of Trade’s soybean oil prices, higher energy market and stronger export outlook.

On a Friday-to-Friday basis, April 2022 surged RM318 to RM6,681 per tonne, May 2022 rose RM351 to RM6,307 per tonne, June 2022 increased RM355 to RM5,921 per tonne, July 2022 widened RM379 to RM5,739 per tonne, August 2022 expanded RM374 to RM5,650 per tonne and September 2022 climbed RM346 to RM5,595 per tonne.

Weekly volume shrank to 226,926 lots from 240,623 lots last week while open interest fell to 192,984 contracts from 193,769 contracts previously.

The physical CPO price for April South jumped RM300 to RM6,700 a tonne. - Bernama