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By Nurul Jannah Kamaruddin & Karina Imran
KUALA LUMPUR, April 5 -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives rebounded mildly on Monday ahead the release of the Malaysian Palm Oil Association (MPOA) data tomorrow.
Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said the market failed to sustain earlier gains due to bullish export and almost flat stock levels as investors took a cautious stance afterwards.
"The CPO futures was directionless today with trading on both sides of the market (buying and selling) ahead of the MPOA March production data," he told Bernama.
Sathia said stockbroking firm CGS-CIMB had projected stocks to improve marginally by 0.9 per cet to 1.31 million tonnes in March 2021 due to a strong improvement in production, while production was expected to surge 21.3 per cent to 1.34 million tonnes.
Exports were estimated to have risen 24.7 per cent to 1.12 million tonnes last month.
CGS-CIMB also expected CPO prices to hover at between RM3,500 and RM4,000 per tonne in April amid low inventory in Malaysia, which will take time to rebuild.
Meanwhile, palm oil trader David Ng said the local market performance was in line with gains in the soybean oil market on the Chicago Board of Trade.
However, he said expectation of higher production data will likely add pressure on overall stock level in the country.
"We locate support at RM3,700 and resistance at RM3,850 per tonne," Ng added.
At the close today, the CPO futures contract for April 2021 went up RM17 to RM4,164 per tonne, May 2021 was RM20 higher at RM3,967 per tonne, June 2021 added RM2 to RM3,739 per tonne, but July 2021 dropped RM3 to RM3,570 per tonne.
Total volume increased to 38,005 lots from 35,700 lots on Friday, while open interest improved to 237,123 contracts from 232,463 contracts previously.
The physical CPO price for April South added RM10 to RM4,170 per tonne.