KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade with a downward bias next week amid profit-taking activities after the recent price rally, dealers said.
Palm oil trader David Ng said that although the market is expected to move lower next week, losses would likely be capped by the prospect of weaker production output and lower stock levels.
"The market is also cautious ahead of the Malaysian Palm Oil Board's (MPOB) supply and demand data for February, due to be released early next week. We see price support level at RM4,000 per tonne and resistance at RM4,200 per tonne," he told Bernama.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said the recent Palm and Lauric Oils Conference 2024 (POC 2024) concluded that palm oil has a tighter production scenario, and this would be supportive for palm oil prices, until production output starts recovering, mostly after the month of May.
"Until then, palm oil can be at a premium over soft oils irrespective of the traditional equations," he added.
For the week that just ended, CPO futures traded mostly higher on the expectation of lower output and stock level depletion, but profit-taking activities limited gains.
On a weekly basis, spot month March 2024 contract rose RM157 to RM4,181 a tonne, April 2024 surged RM163 to RM4,179 a tonne, and May 2024 gained RM128 to RM4,094 a tonne.
June 2024 added RM86 to RM3,982 a tonne, July 2024 perked up RM46 to RM3,870 per tonne, and August 2024 was RM29 better to RM3,798.
The total weekly volume advanced to 305,220 lots from 295,234 lots in the previous week, while open interest widened to 276,573 contracts from 257,308 contracts previously.
The physical CPO price for March South stood at RM4,220 per tonne, up RM150 from RM4,070 per tonne last week. - Bernama
