KUALA LUMPUR – The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to experience a technical correction ahead of data set for release by the Malaysian Palm Oil Board (MPOB) next week.
Interband Group of Companies senior palm oil trader Jim Teh told Bernama that MPOB will release June date on production, stocks and exports, with a higher stock forecast expected.
“I expect the stock will rise due to good weather. I assume there will be demand, but a little bit slow.
“Hence, the futures contract will likely trade between RM3,300 and RM3,400 per tonne.”
David Ng, another palm oil trader, has forecast CPO futures to trade with a slight downward bias.
He is more bullish in his CPO price outlook, projecting the commodity to trade between RM3,700 and RM3,950 per tonne in the short term.
CGS-CIMB Futures Sdn Bhd earlier projected the CPO price to remain firm at RM3,400 to RM4,000 per tonne this month amid low global edible oil inventories and worker shortages in Malaysia.
The futures trading firm expects supply to recover in the coming months, but at a slower rate, due to the lack of labour.
For the week just ended, the market closed mostly lower, tracking the poor performance in soybean oil futures on the Chicago Board of Trade and concerns about a potentially higher output in upcoming weeks.
On a weekly basis, the July contract gained RM122 to RM4,020 per tonne, August recovered RM101 to RM3,940, September earned RM123 to RM3,892, and October firmed RM114 to RM3,812.
Volume was marginally up to 312,159 lots from 312,143 in the previous trading week, while open interest rose to 247,219 contracts versus 233,852.
The physical CPO price for July South advanced RM70 to RM3,050 per tonne. – Bernama, July 10, 2021
