CPO futures likely to trade on a slightly upward bias next week


KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade on a slightly upward bias next week given the recent weakness in prices which may prompt bargain-buying activities, said palm oil trader David Ng.

He said Malaysian palm oil export data (November) are expected to be released by cargo surveyors and would be one of the focuses next week.

"I think the export data may weaken due to weak global sentiment and also the recent strength in the ringgit versus the US dollar.

"We expect prices to trade between RM3,700 and RM4,200 next week,” he told Bernama.

Meanwhile, Mumbai-based Sunvin Group’s commodity research head Anilkumar Bagani said the stronger ringgit for the whole week was also instrumental in a collapse in ringgit-denominated CPO futures.

"The increase in COVID-19 cases in China has a gloomy setback on energy prices, resulting in a weaker macro picture,” he said.

Bursa Malaysia Derivatives was closed on Friday (Nov 18) in conjunction with the special holiday as announced by caretaker Prime Minister Datuk Seri Ismail Sabri Yaakob and will resume operations on Monday (Nov 21).

For the week just ended, CPO futures were mostly lower on the stronger ringgit against the US dollar and a weaker market sentiment, concerns over rising production and weaker exports as well as weakness in the Chicago soybean oil market which continues to pressure prices.

On a weekly basis, CPO futures for the spot month of December 2022 eased RM402 to RM3,791 a tonne, January 2023 was RM459 lower at RM3,828 a tonne, February 2023 decreased RM474 to RM3,850 a tonne, March 2023 lost RM472 to RM3,858 a tonne, April 2023 reduced RM475 to RM3,835 a tonne and May 2023 slipped RM476 to RM3,802 a tonne.

Total weekly volume decreased to 279,872 lots from 332,293 lots in the previous week while open interest improved to 209,300 contracts from 199,122 lots at the end of last week.

The physical CPO price for November South dipped RM320 to RM3,900 per tonne. - Bernama

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CPO , palm oil , David Ng , Anilkumar Bagani , export , ringgit

   

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