CPO futures likely to see profit-taking next week


The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade lower next week on profit-taking after prices rallied to above RM5,600 a tonne, said palm oil trader David Ng.

Recently, the CPO futures for April contract hit an all-time high of RM5,667 a tonne.

Ng projects the CPO futures prices to trade between RM5,400 and RM5,750 per tonne next week.

However, he said the downside remained limited as strong market fundamentals will continue to support sentiment. 

“At the moment, low palm oil stocks as well as stronger demand is keeping the fundamentals strong,” he told Bernama.

Meanwhile, Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said traders will take cues from the Feb 1-20 production and exports data.

“Next week, we foresee exports rising at a faster pace than production,” he added.

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

On a Friday-to-Friday basis, March 2022 jumped RM333 to RM6,042 a tonne, April 2022 added RM190 to RM5,770 a tonne and May 2022 advanced RM143 to RM5,560 a tonne.

Meanwhile, June 2022 rose RM75 to RM5,375 a tonne, while July 2022 gained RM118 to RM5,209 a tonne, and August 2022 perked up RM61 to RM5,073 a tonne.

Weekly volume decreased to 361,780 lots from 446,246 lots last week, while open interest slumped to 264,610 contracts from 272,630 contracts previously.

The physical CPO price for February South jumped RM210 to RM6,070 a tonne.