CPO Futures Likely To Trade With Bullish Bias Next Week

By Nur Athirah Mohd Shaharuddin

KUALA LUMPUR, Oct 26 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to be well supported with a bullish bias next week, a dealer said.

Palm oil trader David Ng said this outlook is primarily driven by a slower pace of production as well as robust demand observed in recent weeks.

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“We expect prices to range between RM4,450 and RM4,650 (per tonne) next week,” he told Bernama.

Meanwhile, Interband Group of Companies senior palm oil trader Jim Teh said the CPO market is expected to experience profit-taking next week, as hedge funds have already purchased over US$20 billion in agriculture futures, including palm oil, over the past seven weeks.

However, he noted that next week will be a short trading week, with Deepavali being celebrated on Oct 31.

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“Most of those who are celebrating Deepavali will be on leave starting Monday, including international traders,” he said.

Meanwhile, BMI, a Fitch Solutions company, stated that CPO futures contracts reached RM4,486 per tonne on Oct 23, 2024, the highest since July 2022.

“Up to Oct 23, palm oil prices have gained 22.6 per cent in 2024 to date, while the Oct 23 close itself represented a 19.5 per cent gain compared to the price level 12 months earlier.

“In brief, the principal drivers of palm oil price strength in October have been export supply concerns, price strength in the wider edible oils complex, exchange rate developments, and increased risk premia in fuel markets,” it said in the outlook for palm oil prices report.

Hence, BMI forecast an average palm oil price of RM3,850 per tonne in 2024 compared to an average price up to and including October 2023 of RM3,966 per tonne (or RM3,937 per tonne prior to the start of October). As for 2025, it projected an average palm oil price of RM3,650 per tonne.

On a Friday-to-Friday basis, the spot month November 2024 contract increased RM314 to RM4,632 per tonne, December 2024 gained RM310 to RM4,584 per tonne, and January 2025 improved RM281 to RM4,536 per tonne.

Meanwhile, February 2025 gained RM258 to RM4,481 per tonne, March 2025 climbed RM234 to RM4,423 per tonne, and new month April 2025 rose RM205 to RM4,152 per tonne.

Total weekly volume contracted to 428,573 lots from 511,988 in the preceding week, while open interest slid to 252,233 contracts from 258,075 previously.

The physical CPO price for October South increased RM300 to RM4,680 on Friday from RM4,380 a week earlier.

-- BERNAMA