Kuala Lumpur:Crude palm oil (CPO) futures on Bursa Malaysia Derivatives may experience a decline next week due to anticipated increases in domestic palm oil inventories and softer crude oil prices, according to Jim Teh, a senior palm oil trader at Interband Group of Companies.
According to BERNAMA News Agency, some analysts predict that Malaysia's palm oil stocks could reach around three million tonnes or more in September, potentially representing one of the highest inventory levels recorded this year.
Teh noted that the drop in crude oil prices, with Brent crude falling below US$100 per barrel, could further pressure CPO futures. He expects the futures to trade between RM4,300 and RM4,400 per tonne next week, suggesting that the current price levels may prompt profit-taking.
Despite this, physical demand is expected to remain strong, with buying interest from India, Pakistan, China, the Middle East, the European Union, and the United States.
David Ng, a proprietary trader at Iceberg X Sdn Bhd, mentioned that market participants would focus on the Malaysian Palm Oil Board's latest supply and demand data, scheduled for release on October 12, for further guidance. Ng added that traders will also keep an eye on movements in soybean oil and crude oil prices, as well as any signs of improvement in palm oil export demand. Prices are anticipated to fluctuate between the RM4,400 support level and the RM4,600 resistance level.
Recent trading data showed that the October 2026 contract decreased by RM121 to RM4,354 per tonne, the November 2026 contract fell by RM137 to RM4,441 per tonne, and the December 2026 contract dropped by RM137 to RM4,535 per tonne. The January 2027 contract slid RM141 to RM4,627 per tonne, the February 2027 contract decreased by RM152 to RM4,709 per tonne, and the March 2027 contract lost RM155 to RM4,786 per tonne.
The weekly trading volume contracted to 609,973 lots from 665,059 lots in the previous week, while open interest declined to 334,658 contracts from 342,948 contracts previously. The physical CPO price for October South also decreased by RM130 to RM4,400 per tonne.