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Crude palm oil (CPO) futures are expected to trend lower next week on the back of rising production and weak overall market sentiment, according to palm oil trader David Ng.
He noted that prices of the "golden crop" are expected to trade between 3,900 and 4,100 ringgit per tonne next week.
Meanwhile, Jim Teh, senior palm oil trader at Interband Group of Companies, said the market is undergoing a technical correction, and expects futures to trade in a range of 3,800 to 4,000 ringgit per tonne.
"There are ample stocks in Malaysia and Indonesia, and thanks to favourable weather, April output is expected to be strong in both countries," he added.
He explained that actual demand will come from China, particularly following Chinese President Xi Jinping's recent visit, as well as from India, Pakistan, Middle Eastern countries and the European Union.
Anilkumar Bagani, head of commodity research at Mumbai-based Sunvin Group, forecast that futures would trade in a range of 3,850 to 4,200 ringgit per tonne, with focus on the pace of palm oil production in Malaysia, as well as clarity on US Renewable Volume Obligations (RVOs) policy for 2025 and 2026.
"Next week's attention will centre on palm oil production data for 1-20 April, released by the South Peninsular Palm Oil Millers' Association (SPPOMA) and the Malaysian Palm Oil Association," he added.
He noted that SPPOMA's production estimates for 1-15 April showed an increase of 3.97%, and the market expects palm oil output to post double-digit month-on-month growth during April.
Anilkumar also said the US Environmental Protection Agency (EPA) is expected to raise its 2025 renewable fuel obligation to 5.25 billion gallons, compared with 3.35 billion gallons in 2024, which would push soybean oil prices higher and could fuel further market optimism given falling US soybean oil stocks.
"Brazil's biodiesel blending mandate, currently at 14%, is also likely to be raised to 15%," he added.
On a weekly basis (Friday to Friday), the May 2025 contract fell 344 ringgit to 4,117 ringgit per tonne, the June 2025 contract dropped 317 ringgit to 4,016 ringgit, the July 2025 contract declined 358 ringgit to 3,975 ringgit per tonne, the August 2025 contract weakened 251 ringgit to 3,961 ringgit, the September 2025 contract lost around 253 ringgit to 3,959 ringgit per tonne, while the October 2025 contract fell 311 ringgit to 3,960 ringgit per tonne.
Weekly trading volume fell to 434,196 lots, compared with 627,813 lots the previous week, while open interest dropped to 239,000 contracts from 486,398 contracts.
The physical price for April-delivery crude palm oil (South Malaysia) fell by 270 ringgit to 4,250 ringgit per tonne.
Source: Bernama