The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trend higher next week on the expectation of higher April production, with the price is likely to trade below RM2,000 per tonne.
Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa told Bernama that traders await the scheduled release of supply and demand data by the Malaysia Palm Oil Board (MPOB) on Tuesday.
According to him, they are seeking fresh leads, particularly on the extent of production rise and changes in end-month stocks.
“Apart from the MPOB report, traders will also look into export estimates for from May 1-10 May 2020 which will be released next week.
“The market expectation is near 20 per cent rise in production and a better May 1-10 exports could lead to the market trading higher next week,” he said.
On Wednesday, the Malaysian Palm Oil Association (MPOA) revealed the country’s overall CPO production increased 19.89 per cent in April 2020 compared to the previous month.
For the week just ended, the market was traded mostly lower as it continued to be pressured by concerns over higher April production, weaker crude oil prices and soyabean oil futures on the Chicago Board of Trade.
On Thursday-to-Friday basis, the CPO futures contract for May 2020 fell RM42 to RM2,060 per tonne, June 2020 down RM71 to RM2,034 per tonne, July 2020 eased RM68 to RM2,020 per tonne and August 2020 dipped RM58 to RM2,023 per tonne.
Weekly turnover slipped to 183,886 lots from last Thursday’s 184,464 lots while open interest increased to 263,659 contracts from 260,537 contracts.
On the physical market, the CPO price for May South was RM72.50 lower at RM2,022.50 per tonne.
The local market will be closed on Monday in lieu of the Nuzul al-Quran public holiday which falls on Sunday.