KUALA LUMPUR – The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is poised for a technical correction next week, following this week’s uncertain price movement, said dealers.
Interband Group of Companies senior palm oil trader Jim Teh said the price is expected to hover between RM4,100 and RM4,200 per tonne, with more physical buyers anticipated.
Demand is projected to increase in the coming week, which will reduce the level of stocks, he told Bernama.
“Besides physical buyers, the market pattern next week will also be influenced by paper trading.”
Singapore-based Palm Oil Analytics owner and co-founder Sathia Varqa said CPO trading will focus on production and take a cue from soybean oil on the United States Chicago Board of Trade.
“The launch of the East Malaysia Crude Palm Oil Futures contract by Bursa Malaysia will make the news.
“The Malaysian September supply and distribution estimates will also be out.”
Yesterday, local CPO futures gave up 70% of the gains from Thursday’s close – when the benchmark December 2021 contract reached an all-time high of RM4,595 a tonne – due to profit-taking.
“Markets will closely monitor the production data from the Malaysian Palm Oil Association,” said Varqa.
For the week just ended, Malaysian CPO futures finished mostly higher, driven by concerns about weak production and the expectation of strong demand in the coming weeks.
On a Friday-to-Friday basis, October 2021 increased RM86 to RM4,751 a tonne, November 2021 gained RM74 to RM4,618 a tonne, and December 2021 was RM64 higher at RM4,505 a tonne.
January 2022 advanced RM75 to RM4,414 a tonne, February 2022 rose RM94 to RM4,329 a tonne, and March 2022 gained RM109 to RM4,227 a tonne.
Weekly volume improved to 273,151 lots from 263,245 in the previous trading week, while open interest increased to 231,147 contracts from 225,955 previously.
The physical CPO price for October South added RM110 to RM4,780 a tonne. – Bernama, October 2, 2021
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