THE crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to remain cautious next week as traders await the latest supply and demand data scheduled to be released by the Malaysia Palm Oil Board (MPOB) on Tuesday.
Singapore-based Palm Oil Analytics owner and co-founder Dr Sathia Varqa told Bernama that the traders are seeking a fresh lead, particularly on the extent of production rise and change in end-month stocks.
The Malaysian Palm Oil Association (MPOA) yesterday revealed that palm oil production increased 12.9% in February 2020 and the situation is said to put pressure on CPO stocks in the country.
“Besides, the price movement will also be dependent on external factors, particularly the escalating Covid-19 outside China which would impact the market,” he said.
For the week just ended, the market retreated on the final day of session on the back of stronger palm oil production after rallying for four sessions in a row due to higher oil prices, positive sentiment in the local equity market, as well as bargain-buying activities.
On a Friday-to-Friday basis, the CPO futures contract for March 2020 recovered RM91 to RM2,448 per tonne, April 2020 and May 2020 expanded RM132 each to RM2,464 per tonne and RM2,451 per tonne, respectively, and June 2020 strengthened RM130 to RM2,453 per tonne.
Weekly turnover decreased to 344,679 lots from last Friday’s 385,615 lots, while open interest fell to 306,292 contracts from 332,669 contracts.
On the physical market, the CPO price for March South stood at RM2,480 per tonne. – March 7, 2020, Bernama
