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Crude Palm Oil Futures Likely To Trade With Downward Bias Next Week


According to dealers, the Crude Palm Oil (CPO) futures contract on Bursa Malaysia Derivatives is anticipates to trade with a downward bias the following week due to negative global sentiment.

Jim Teh, a senior palm oil trader at Interband Group of Companies, stated that the market would see additional profit-taking the following week, with prices fluctuating between RM3,700 and RM3,900 per tonne due to recent price increases that were excessive.

“The prices are being pushed down by the high levels of stocks in Malaysia and Indonesia. But demand from Pakistan, India, and China, which is buying for the Muslim holiday season, will support prices,”

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In the meantime, Anilkumar Bagani, head of commodity research for the Mumbai-based Sunvin Group, state that the CPO market would continue to be influenc by negative sentiment across all asset classes due to the US banking crisis.

“Since late 2022, Crude Palm Oil Futures costs had upheld by market assumptions for fundamentally higher biodiesel utilization and lower trades from Indonesia, as well as the effect of weighty precipitation toward the beginning of 2023 on yield.

“However, yields are trending upward according to the most recent production data from Malaysia and Indonesia. Malaysia’s labor shortage, which is also address rapidly, is likely to resolve by the first half of 2023. CPO prices and sentiment are affect by this, he added.

With the exception of Tuesday, palm oil traded mostly lower during the week that just ended, following the trend of other vegetable oils in the face of weaker global sentiment brought on by lower crude oil prices and the recent collapse of US banks.

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The new spot month for April 2023 fell by RM320 to RM3,751 per tonne on a weekly basis, while May 2023 fell by RM380 to RM3,607 per tonne, and June 2023 fell by RM408 to RM3,512 per tonne.

In the meantime, the price per tonne decreased by RM397 in July 2023 to RM3,474, by RM376 in August 2023 to RM3,457, and by RM354 in September 2023 to RM3,450.

Open interest increased to 193,764 contracts from 180,023 contracts at the end of the previous week, and total weekly volume increased to 428,480 lots from 359,498 lots.

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