CPO futures likely to trend higher

KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trend higher boosted by stronger soybean oil prices.

“Local CPO is expected to trade within the range of RM3,600 and resistance at RM3,850,” a palm oil trader David Ng told Bernama.

Meanwhile, Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa said April 1 to 20 exports would be higher but at a slower pace of increase.

“New benchmark month, July 2021, stayed at above 100 points most of the day, locking in 120 points to end at RM3,710 per tonne.

“Front-month May 2021 closed at RM4,186 or RM476 premium over the third month, reflecting the poor supply situation for the nearby crop month as exports tick higher,” he said.

He added that Southern Peninsula Palm Oil Millers' Association (SPPOMA) and Malaysian Palm Oil Association (MPOA) production should keep a check on futures and cash price rally.

In the monthly palm oil data by Malaysian Palm Oil Board (MPOB) released on Monday, CPO stocks continued to show an increasing trend in March 2021, growing 12.37 per cent to 742,742 tonnes from 660,987 tonnes in February 2021.

Overall, total palm oil stocks rose 10.72 per cent to 1.45 million tonnes from 1.31 million tonnes previously, it said.

On a Friday-to-Friday basis, CPO futures contracts were higher, with May 2021 surging RM136 to RM4,191 per tonne; June 2021 increasing by RM155 to RM3,922 per tonne; July 2021 rising RM162 to RM3,716 per tonne; while August 2021 was up RM169 to RM3,589 per tonne.

Weekly volume improved to 301,540 lots from 276,736 lots the previous week, while open interest increased to 267,814 contracts from 260,493 contracts a week earlier.

The physical CPO price for April South fell RM50 to RM4,250 per tonne from RM4,300 per tonne on Friday last week.