CPO futures rise in KLCE mid-session; how are Indian markets performing?

14-May-2025 10:44 AM

CPO futures rise in KLCE mid-session; how are Indian markets performing?
★ Crude Palm Oil (CPO) futures on the Kuala Lumpur Commodity Exchange (KLCE) saw a sharp rebound in mid-session trade, supported by improved export demand and rising global edible oil prices. However, experts caution that the uptrend may be short-lived due to strong production across major exporting nations.
Contract highlights:
★ May contract jumped by 173 points to close at 4,000 ringgit, though volume remained very low at just 20 lots due to expiry on May 15.
★ June contract rose by 65 points to 3,960 ringgit, with an intraday range of 3,905 to 3,999 ringgit and volume at 2,731 lots.
★ July contract closed 60 points higher at 3,953 ringgit after trading between 3,894 and 3,996 ringgit. With 21,778 lots, it was the most active contract.
★ August contract gained 51 points to 3,946 ringgit, with a high of 3,989 and low of 3,897. Total volume stood at 12,610 lots.
Support factors:
★ CPO prices found support after several sessions of weakness due to signs of improved export demand and rising prices of other edible oils such as soybean and sunflower oil. However, strong production in Malaysia and Indonesia may boost supply and cap further upside.
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Indian market overview:
★ Mustard and soybean production in India has been good this season. While oilseed availability is ample, crushing demand remains weak.
★ Agencies like NAFED have procured around 1.8 million tonnes of soybeans, of which 300,000 to 400,000 tonnes have been sold in the open market via tenders.
★ Government warehouses hold significant mustard stocks, with more likely to be offloaded in the coming months.
★ A large volume of mustard purchased in the previous season was released during the arrival period, keeping prices under pressure and even pushing them below MSP.
Outlook:
★ With strong government stocks and rising imports, oilseed availability is expected to remain comfortable throughout the year. Traders are advised not to chase the current rally, as the recent gains in prices may be temporary. Watch soybean sowing trends closely, as they will determine the medium-term price trajectory.