CPO FUTURES TO SEE BEARISH BIAS NEXT WEEK ON RISING OUTPUT, WEAK MARKET SENTIMENT

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, April 19 (Bernama) -- The crude palm oil (CPO) futures market is expected to trade with a bearish bias next week given the rising output and weak general market sentiment, said palm oil trader David Ng. 

Therefore, he anticipated the golden crop’s prices to trade between RM3,900 and RM4,100 a tonne next week.

Meanwhile, Interband Group of Companies senior palm oil trader Jim Teh said CPO futures are likely to be in a technical correction within the range of RM3,800 to RM4,000 per tonne.

“There are plenty of stocks in Malaysia and Indonesia. Due to the good weather, production for April is seen to be good in Malaysia and Indonesia.

“Physical buying will come from China, especially with the recent visit of Chinese President Xi Jinping, besides India, Pakistan, Middle East and European Union countries,” he added. 

Mumbai-based Sunvin Group commodity research head Anilkumar Bagani expected CPO futures to trade in a range of RM3,850 and RM4,200 a tonne with the focus on Malaysian palm oil production pace and US renewable volume obligations (RVOs) mandate clarity for 2025 and 2026.

“Next week the focus will be on April 1-20 palm oil production data from the Southern Peninsular Palm Oil Millers' Association (SPPOMA) and the Malaysian Palm Oil Association,” he added. 

He said the SPPOMA’s April 1-15 production estimates came at +3.97 per cent, and the market is expecting palm oil production to show a double-digit growth in April on a month-on-month basis. 

Anilkumar said there are also expectations that the US Environmental Protection Agency will raise the RVO mandate for 2025 to 5.25 billion gallons from 3.35 billion gallons in 2024, which will lead soybean oil prices to muster gains and more bullishness is likely to follow due to the lower soybean oil stocks in the US.

“The Brazilian biodiesel mandate, currently at 14 per cent is also likely to go up to 15 per cent,” he added.

On a Friday-to-Friday basis, the spot month May 2025 contract fell RM344 to RM4,117 per tonne, June 2025 slipped RM317 to RM4,016, July 2025 contract decreased RM358 to RM3,975 per tonne, August 2025 weakened RM251 to RM3,961, September 2025 lost RM253 to RM3,959 per tonne, and October 2025 depreciated RM111 to RM3,960 per tonne. 

Weekly trading volume declined to 434,196 lots from 627,813 lots the previous week, while open interest dropped to 239,000 contracts from 486,398 earlier.

The physical CPO price for April South was RM270 lower at RM4,250 per tonne.

-- BERNAMA