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CPO futures to see quiet trading next week

13/02/2021 10:05 AM

By Anas Abu Hassan

KUALA LUMPUR, 13 -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to see muted trading next week due to the Chinese Lunar New Year celebration, with prices projected to hover between RM3,400 and RM3,500 per tonne.

Interband Group of Companies senior palm oil trader Jim Teh said investors would more likely start trading on Feb 17, taking a long holiday weekend, although the market resumes trading on Monday, Feb 15.

"It will be a very timid and quiet market since some of the palm oil mills will also be closed next week," he told Bernama. 

Conversely, Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa expects the market to be volatile but broadly higher next week, with market players monitoring the Southern Peninsular Palm Oil Millers Association (SPPOMA) production data.

“We will get the SPPOMA production data for the first half of February, which is expected to be high.

“We will also get export data on Monday and we project the number to be stronger by more than 30 per cent,” he said.

For the holiday-shortened week, the CPO price was mostly higher, backed by expectations of weaker output, stronger soybean oil price, and strong export estimation of between 33 per cent and 45 per cent due to rising demand.

On Wednesday, the Malaysian Palm Oil Board (MPOB) released its monthly data which revealed that CPO stocks rose 9.76 per cent month-on-month (m-o-m) to 640,781 tonnes in January 2021 from 583,811 tonnes in December 2020.

Overall palm oil stocks increased by 4.68 per cent m-o-m to 1.32 million tonnes from 1.26 million tonnes previously, while production slid 15.52 per cent m-o-m to 1.12 million tonnes versus 1.33 million tonnes earlier.

On a weekly basis, CPO futures contract for February 2021 rose RM28 to RM3,942 per tonne, March 2021 appreciated RM207 to RM3,836 per tonne, April 2021 increased RM183 to RM3,558 per tonne, and May 2021 advanced RM130 to RM3,346 per tonne. 

Weekly volume depreciated to 201,652 lots from 276,743 lots in the previous week, while open interest shrank to 220,640 contracts from 253,976 contracts a week earlier.

The physical CPO price for February South remained unchanged at RM3,940 per tonne.



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