CPO futures seen trading cautiously ahead of MPOB data

KUALA LUMPUR: Crude palm oil (CPO) futures on Bursa Malaysia Derivatives (BMD) are expected to trade within a tight range in the near term, as the market turns cautious ahead of key supply and demand data from the Malaysian Palm Oil Board (MPOB) on Wednesday.

Affin Hwang Investment bank Bhd said while futures closed higher on Monday, supported by weaker early September production and firmer competing oils, traders expected muted price action in the short term as they awaited clearer market signals.

The benchmark November contract settled RM40 higher at RM4,488 per tonne, buoyed by a 6.28 per cent drop in output during Sept 1-5, as reported by the Southern Peninsula Palm Oil Millers Association (SPPOMA).

However, momentum faded toward the close, with prices trading sideways in the late session.

“Market sentiment is expected to remain cautious on Tuesday. The MPOB’s August report, due for release tomorrow, will be closely watched for updates on inventory levels, exports, and production,” Affin Hwang said today.

This could reshape short-term price direction, it added.

In early trade, the November contract is projected to open around RM4,470-RM4,480, slightly softer from Monday’s close.

During the overnight T1 session, the contract briefly touched RM4,500 before ending flat.

Affin Hwang said technically, analysts see immediate support at RM4,445-RM4,450, while resistance is pegged at RM4,520-RM4,530.

“Any upside may be limited until the release of the MPOB data provides fresh catalysts.Until then, prices are likely to stay rangebound, with trading driven more by technical levels and external market cues from Dalian and Chicago Board of Trade soyoil futures,” the firm added.

© New Straits Times Press (M) Bhd

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